I am new to this forum, I just created an account because I think this topic wasn’t covered.
I am french and I live in Switzerland and I have a few French and German stocks paying me dividends.
On my broker accounts (degiro and ibkr), my french dividends are taxed at a rate of 25%. But when entering my stocks into the tax software, only 12.8% are taken into account on the DA-1.
So do you think that if I hold my french stocks at a french broker I would only pay the 12.8% tax on dividends ? Are they asking for any proof of fiscal residency ? And then which french broker would you suggest ?
Would it be the same for german stocks ?
Do Degiro and IBKR know that you’re a Swiss tax resident, not a French tax resident? French withholding tax is 12.8%. French tax residents additionally pay 17.2% in social surtaxes.
As I understand it, Swiss tax residents shouldn’t have that extra 17.2% deduction, with any broker. However, I don’t hold French stocks myself, so I can’t speak from experience, and I may be missing something.
For German stocks, you may need to request a partial refund from Germany, see Newbie question on German individual stock dividends, IBKR
It’s possible that something similar is required for French stocks as well to get the 17.2% back.
Well actually yes degiro and ibkr know that i’m a swiss tax resident. And they are not taking the extra 17.2% as this is a french tax for french resident, but they take an extra 12.2% which to be honest I don’t know exactly what it is. I read somewhere that having an account with a french broker would remove those extra 12.2% but I’m not sure
Gotta make this quick, since I have to be back at work.
My very tentative interpretation, without much research:
Given how France seems to charge different withholding tax rates, that is a 25% withholding tax on distributions to non-resident companies. vs. the lower 12.8% rate for (non-resident) individuals, I assume you are taxed at the corporate rate.
Why. I suppose it has got to do with the way your shares are held (in street name, not in your name) through IBKR - so that your status as an individual does not get „passed through“, and the higher corporate rate is applied to your dividend.
See this Bogleheads thread describing the same issue (where IBKR’s response seems indifferent).
If don‘t know about French brokers, but if any broker manages to „get this right“ for individuals like you and only apply the individual rate without you having to register these shares in your name, I‘d assume it‘s probably a French broker.
Thanks for the answer,
The link for the bogleheads thread doesn’t seem to work though.
Thanks a lot San_Francisco.
Did anyone try the approach of holding french stocks in a french broker ?
I own my French stocks on 2 French brokers for historical reason.
You can declare in November that you do not want to be taxed on PFU for the following year which avoid to be taken at source.
Sorry what’s PFU ? And on which broker can you ask that ?
It’s Saxo and B4Bank but I beleive all of them should ask you.
The Prélèvement Forfaitaire Unique (PFU) is the 30% French tax taken at source.
Did you need to provide any document to remove that Prélèvement Forfaitaire Unique ?
Apparently it’s only available for French resident on Saxo
Yes it seems like the screen you show is as if you are taxable in France. It says “Vous pouvez être dispensé des 12,8%” but still you must pay the 17,2% which are for french resident. And i’m looking for the opposite, paying only the 12,8% and not paying the other 17,2 nor the other 12,2 which i’m paying via degiro or ibkr