I am new here and i am also new with investments. I am working in Switzerland with B Permission, and i would like finally to start investing (better later than never ) but i am a bit ,scared" about the tax, how it looks like etc. Now the ,Quellensteuerabzug" is taken automatically by my employer from my salary, so i don’t need to do anything. So my question is if i would like to buy a ETF, for example ETF IUSQ.DE, S&P 500, need I register it somewhere at the end of the year or something like that? Or only when i will sell it with profit in future?
And what about if i will by some ETF with dividends or stocks or shares with dividends?
I guess dividends will be treated as income, so how should I to deal with it?
And last question, how big is the difference if i would like to buying on broker from other country, for example XTB from Poland (I am from Poland so for me is easier to start on this broker) instead of Swissquote or Interactive Brokers.
Thanks in advance for your answers
Have a nice day
Perhaps a good start would be to familiarize yourself with the Quellensteuer (income tax at source) as discussed here
There are a both a wealth and an income threshold, when you are required to file a tax return. Or you may want to do it voluntary already now, in anticipation of your permit C (permanent residency) status and to avoid any surprises later?
Tax people usually know ETFs with acumulating dividends and tax your additional income accordingly, once you declare your position in such security. Swiss brokers have annual reports that are more aligned with Swiss tax requirements than foreign brokers, but tax people will usually ask nicely if you need to provide something else.
My yearly salary is lower than 120k and Quellensteuer is deducted from my salar monthly by my company.
But my question is, if i have will buy just accumuliate ETFs (without dividends) then I don’t need to pay any tax about that until I will not sell it?
And the other question, if I understand correctly if I will buy ETF which pay dividends then I need to register it at the end of the year and the tax accountant people should without any problem help to me with that?
In Switzerland, accumulating ETFs are taxed the same as distributing ETFs. You get taxed on the internal dividends.
On the other hand, selling ETF shares is not a taxable event in Switzerland for private investors.
There are canton-specific thresholds on wealth and dividends. If you’re above one of these thresholds, you need to request ordinary tax assessment. Also for this it doesn’t matter whether your ETFs are accumulating or distributing. Here is some more information (in German) with a list of the thresholds.
There are 2 main factors that can make it mandatory for you to file a tax return that you need to proactively declare (i.e. tax office can not know about them so it’s your responsibility to flag it):
you have substantial taxable wealth, because then your wealth tax would be significant
you have substantial income that should be taxed but wasn’t subject to withholding tax - in this case obviously the tax office wants you to declare it
You should check the thresholds for your canton. For example, in ZH the thresholds are more than 80k of wealth (160k for a couple) or more than 3k of untaxed income.
When you’ll buy ETFs (assuming you are not going to use a Swiss broker) the dividends won’t be taxed so if you are under the threshold - you can be in a sweet spot where you still don’t need to declare them.
Be careful as once you will need to declare taxes - you will do the full tax return and actually compute the real tax liability (as opposed to the tax at source which is an approximation), so for example if you live in a Commune with a high income tax rate, you might end up having to pay a lot of extra taxes and it will have nothing to do with your ETFs
Unfortunately (or maybe fortunately in this case) I don’t have any taxable wealth, I am working hard to change my life direction and finally start to build up my wealth.
And my income (salary from company for which i work) is also no high I have under 80k per year.
So if I will use for example this XTB Broker (no Swiss Broker) to buy some ETF like ETF IUSQ. DE or S&P 500 or even ETF which pay dividends but I will be under the threshold with my wealth then can be a possibility to not declare a tax?
How the situation looks like in Switzerland with buying Stocks separately? For example Nvidia, Apple etc. ?
As i thought it will be not so easy. But I don’t want to give it up because of fear of taxes.
Actually you should check how it will look like on your broker’s side. Will they try to apply some taxes to you considering that you are a Polish national, do you have to submit some tax forms, etc. Your compatriots might help with this question.
The same, but you shouldn’t buy individual stocks. One global ETF is the way to go in your situation.
The usually quoted threshold of <3000 CHF of non-taxed income to not be required to file a tax declaration translates, assuming a global dividend yield of 2%, into 150k CHF in a world ETF. You are not there yet.
I suppose, but until today I haven’t even filed a tax return, because I have a B permit and the “Quellensteuer” is collected automatically by the company I work for.
Anyway, without the perfect German language it will not be so easy for me, so for example if I am living in Canton Aargau here I should search for info about taxes? Or if I go to Steueramt in Aargau they can answer these questions?
Good to know that!
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) but i am a bit ,scared" about the tax, how it looks like etc. Now the ,Quellensteuerabzug" is taken automatically by my employer from my salary, so i don’t need to do anything. So my question is if i would like to buy a ETF, for example ETF IUSQ.DE, S&P 500, need I register it somewhere at the end of the year or something like that? Or only when i will sell it with profit in future?