Tax optimisation for ETF investing

this is very simple and applies to all interests/ dividends (savings account, stocks, bonds, etfs,…)
you are simply charged 35% of it (unless below a certain threshold). then, when you declare it as income with yout rax declaration, it bill be added to your taxable income. the 35% verrechnungssteuer you therefore already paid is substracted from you total tax due.

There is no withhold tax for funds/etfs/stocks based outside Switzerland

do you know where to find these thresholds? Maybe there’s an advantage to stay below them.

Thanks for clarifying, the terms income tax and withholding tax got mixed in my head the other day.
This makes me want to read the books (1 2) from Xavier Oberson on Swiss & International Fiscal Laws but they’re far from cheap.

I personally need to develop a plan B wrt the US estate tax as I have more than 60k on US based assets.
A solution could be to co-own the assets with my partner or someone else in the family in case I make it too early on the darwin awards.
Anyone subject to the US Estate Tax already figured out a plan?

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I’m still struggling on this topic in order to understand which option is better…

Let’s take a classic example: iShares MSCI World (I actually have some shares of the Acc version).

If I search on the ESTV (2016) I find that the Acc version ( ) in 2016 is taxed on an income of 0.833 CHF, while the Dist version ( ) in 2016 is taxed on a total income of 0.644 CHF (total of the 4 distributions).

What does it mean ? The Dist version is taxed on a smaller amount while it takes into account that the 4 distributions had been already taxed elsewhere ?
The Dist version has a higher TER (0.50% vs 0.20%): does it make any difference in the above example ?

According to the ictax infos, the Acc version - in 1 Year - increased its value from 41.7 to 45.09 CHF (+3.39 CHF) while the Dist version from 35.29 to 37.81 CHF (+2.52 CHF). The “growth” difference between the two is 0.87 CHF -> more than the sum of the distributions, and therefore more taxed amount for the Acc version.
Thus, from a tax point of view, the situation would seem the same for both investments… what do you think about it ? Am I missing something ?


Nope, in CH usually you are taxed the same for Acc or Dis ETF funds. Even if it is internally reinvested (in Acc case), it still counts as Income.

Personally I prefer dividend because in retirement you have to take out 4% to live. If you have a normal World fund with 2% dividend, that means that you have to sell 2% of your shares to generate cash to live on. (4% rule). This 2% will be sold and you pay 0.15% of Stamp Duty Tax on it.

If you have Acc ETF, in Retirement you have to sell 4% of your funds to generate income. And you pay 0.15% stamp duty on the transaction to get the full 4%.

In accumulation phase maybe the Acc fund have some minor advantages, but it does not cancel the large disadvantage of having to sell the whole 4% in retirement. And doing accumulation phase with Acc funds, selling them and buying dis fund in retirement is the worst choice of all.

this of course only has value for retirement in CH, if you are moving away well figure it out yourself :smiley:


Hi @Grog,

thank you for the clarification and the good points.

One question: in the accumulation phase, when you get the dividends you usually reinvest them to take advantage of compound interests, thus when you’ll sell (retirement phase) you’ll have the same Stamp Duty tax “problem”, right ?

Not really. In the accumulation phase I reinvest the dividend “manually” with a distributing ETF. This is the disadvantage over the accumulating ETF: my dividends are subjected to the Stamp duty fee while reinvesting. But since they are not so high, we ar talking literally about cents for the moment.

In retirement I will receive 2% of dividends more or less from my ETF.
Example: 1 million ETF, need 40k to live. I receive 20k from dividends every year, for the other 20k I have to sell 20k of ETF shares. So I’ll pay 30 bucks of stamp duty for this 20k.

If I have accumulating ETF, I have to sell 40k of shares and pay 60 chf of stamp duty fee.

Nota bene: historically sometimes ETF index had dividend up to 4%. In those cases with a distributing ETF you won’t have to pay a thing vs the usual 60 chf with an accumulating.

Is very little money, but one thing more to consider. Together with other costs involved while selling (spread buy/ask, transaction fees) in retirement phase in CH right now is better to have distributing ETF. And is really not worth it to accumulate wealth with an acc ETF, then switch by selling and buying again. You’ll lose instantly minimum 0.3% of your whole portfolio for the double stamp duty tax involved in selling and buying.

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hey Grog,
did you consider that the 20k dividends are subject to your income tax? at 20k/y, this would be for a married copule in zurich 1.47% or CHF 293 (from income, wealth tax in this case is around CHF 1800). this does not apply to the sale of shares, no?

I’m sorry nugget but we already saw that income for acc or dis is always = dividend, no matter the type of fund. So if you have acc ETF you have the same income as the dis ETF, and pay the same taxes on 20k.

Income is the same in the two cases: acc ETF or distributing ETF report the same amount of Income.

So even with acc ETF you sell 40k of shares to create your own “dividend” for the 4% rule, but when you check your etf online for taxes you still have the internal accumulated dividend to report as income.


sorry i had my head off writing that comment. please ignore it! :rolling_eyes:

we would need some non-dividend-etf to make sense out of my comment

Hey T78a,

do you know where to find these thresholds?

i believe this is a CHF 200 threshold on interest rates on saving accounts, so not applicable to anything related to stocks / bonds / ETF. but again, this is not a veryfied source of information :confused:

The threshold is indeed 200 CHF, you should find it here: Bundesgesetz über die Verrechnungssteuer ( ), art 5c

Von der Steuer sind ausgenommen:
c. die Zinsen von Kundenguthaben, wenn der Zinsbetrag für ein Kalenderjahr 200 Franken nicht übersteigt

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@weirded this law article is for the witholding tax, not the income tax.

The witholding tax is only for fund based in CH. All european vanguard funds are based in Ireland.

Hi @wapiti, I think the 200 CHF threshold @nugget was referring to in his original post refers to the withholding tax, which - as you correctly state - applies to interests on assets based in CH (like CH stocks or checking and saving accounts, in the old times when they still paid interests…:joy:).
I’m not aware of similar thresholds for the income tax.

=> to be precisely correct, this CHF 200 threshold applies to saving accounts, not stocks dividends! the latter are taxed from the first rappen.
Income tax is totally different in calculation. however if you look at the tables, you also find “thresholds” up to which you basically pay no taxes.

You are right about withholding tax on stocks (my fault).
About income tax: of course under a certain taxable income you don’t pay taxes (something like i.e. 18k for the federal tax for singles) but in that case you probably have other concerns than choosing the best asset for your investments… :flushed:
Anyhow I think we are going OT towards the original question from T78a which arose discussing about the withholding tax for swiss based funds (you stated: “you are simply charged 35% of it (unless below a certain threshold)”, to which he then asked: “do you know where to find these thresholds? Maybe there’s an advantage to stay below them.”). In the meantime the source for this has been shown. The only mean I know to avoid paying tax(es) at all (withholding tax included) is going (loan + other incomes - deductions) under the minimum taxable income…

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to raise awareness of my brushed up initial post on international witholding tax and its consequences for ETF choice

please comment/ add relevant information! :slight_smile:

I didn’t want to open a new thread for this.

Do I get it right, that when I have a US domiciled fund, for example from Vanguard at IB, I can get back the whole 30% withholding tax when I file the two forms mentioned in the initial post?

as I understand, no, but almost:
you can reclaim 15% out of the 30% by filing the W8-BEN with IB.

then you can have the remaining 15% being credited for your income tax by filing DA-1 with your Tax authority. thereby reducing your income tax bill by this amount.

plz correct me if I am wrong!


if I hold a CH domiciled ETF (i.e. SPI ETF) via IB London, are then the following two statements true:

  • dividends witholding is 35%
  • with tax declaration, I can deduct the full 35% from my income tax

thanks :slight_smile:

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