Tax optimisation for ETF investing

[Dr.PI]

The advantage of VT vs. VWRL in level 2 withholding tax is more like 7%.

Splitting the world: creating tax-advantaged global stocks portfolio using funds in 3a account

In case of a Swiss resident, tax optimization includes (at least) two things: (i) less non-reclaimable withholding tax on dividends and (ii) less dividends which are taxed as income. So it is for example possible to move a segment that pays more dividends into a tax-sheltered account (3a funds at finpension/VIAC). Dataset 2: % of non-reclaimable witholding taxes on dividends and dividend yields for some “whole world” (with and without emerging markets) funds. [wht2]

7% of 2% dividend yield is 0.14%. There is another disadvantage of VWRL, 0.14% higher TER. These costs are also taken from dividends

Splitting the world: creating tax-advantaged global stocks portfolio using funds in 3a account

I was thinking about updating this post, but decided not to. Too many variables that affect total investment costs. Instead I decided to outline what I think is a right way to calculate the total investment costs for an ETF. As a Swiss investor, one is only taxed on dividends, and namely up to 3 times. Let’s consider the whole process. All companies included in a fund are paying out dividends, which all together make gross dividend yield (in %) D_G. The gross dividend yield of various baskets …

So the difference of dividends distributed by VT vs. VWRL should be more like 0.28% p.a. I have no idea why you don’t see this difference. And I also don’t think these are index yields. I guess it is some kind of accounting artefact.

Try to check manually actual value distributed at a specific date divided by the closing price of the ETF unit a day before and sum up values for one year?