There’s no provision in swiss tax law for this, and that’s pretty much what their explanation will be. End of story.
Whereas DA-1 is based on dual-tax treaties and hence equivalent to law. (But you still need to prove that the distributions were dividends at least in the case of US-dom funds.)
Trying to decide on which MSCI World ETF I will invest in the coming years. One is based in IE while the second is in LU. There isn’t any information about LU based funds on the first post.
Which one would you pick and why ?
I would pick something US based (more liquidity, less fees, less withholding).
But with an UCITS fund, go with IE (iirc LU has 30% US withholding while IE has 15%).
ISIN?
On a quick search on justETF, I can only find a distributing Irish fund from HSBC.
If it’s physically replicating.
Would it make a difference when replicating by swap?
Good question, my impression is that they’re happy to just get the extra revenue 
since the benchmark has the withholding afaik.
Swapper shouldn’t have any dividends… You are basically betting with someone on the future value of the stock.
Like “I give you 1000CHF so you can buy x shares of an MSCI World fund, in 1 month you give me back whatever those x shares will be worth.” The fund isn’t involved at all, 2 persons could do this privately even.
But I don’t know, maybe the tax authorities are smart enough to figure out what the swapper funds are doing?
Sure - but depending on how the swap fund is constructed, the luxembourgish swap ETF might outperform the Irish that has to pay non-refundable withholding taxes. As an example…
Comparing (2010 or older) MSCI World ETF at JustETF, whatever timeframe I choose, Comstage LU0392494562 seems to fare rather well amongst the competition - which is a Luxembourgish swapper. Though I haven’t looked at the impact of Swiss taxation on returns for individuals.
In any case, you rarely if ever get a full replication, as most funds will only partially replicate (so-called “optimized sampling”).
Obviously they are, in many countries, as an income portion has been taxed for years.
This article on Morningstar illustrates that Swap ETFs on the S&P 500 fare better (link: http://www.morningstar.ch/ch/news/190389/bei-usa-etfs-ist-es-„hip-to-be-swap“.aspx) than IRL based ETFs for that index (for the time being).
My bad, the HSBC one is also from IE.
@nugget @Bojack @wapiti @1000000CHF @glina I’ve followed a lot of your posts so tagging you to ask questions.
I’m new to investing and have been enjoying reading this forum last 6 months. Thanks to everyone here for making such a knowledge base and discussion. I have a few newbie questions:
The google sheet has orange colour column " reclaim using the DA-1 form, assuming income tax > 15%"… Does it mean 15% overall tax rate or 15% marginal tax rate?
As for Emerging Markets (Ireland domiciled), there are 2 options (Distributing & Accumulating) for same fund (both available in ICTax):
EIMU … iShares Core MSCI EM IMI UCITS ETF USD (Dist) … TER 0.18%
EIMI … iShares Core MSCI EM IMI UCITS ETF USD (Acc) … TER 0.18%
If my tax rate is between 8-10% and marginal tax rate between 15-20%, does it make any difference from tax perspective whether the fund is distributing or accumulating? I like the convenience of Accumulating ETF, as I am going to be accumulating for next ~15 years.
Is there a VEA equivalent domiciled in Ireland?
Thanks in advance.
Just noticed that the links related to the DA-1 “wegleitung” (walkthrough) from Kanton Zürich are broken in the top post. I wasn’t able to find the right source. Can anyone help?
The the tax office considering people as professional traders has been the subject of an article in last week’s NZZ
https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.pwc.ch/de/press-room/interviews/pwc_press_20190826_nzz_wick.pdf&ved=2ahUKEwjt_Lq7s7DkAhXB5KYKHVbeCn0QFjAAegQIAhAB&usg=AOvVaw293PB4Qfyl8Gnu22DhYb_J&cshid=1567367723048
Dea all,
Anybody had a look at the new tax treaty between US and Switzerland.
From here: https://viac.ch/en/academy/lower-fees-and-higher-returns/ it seems the tax treaty actif now. Does this means it becomes better to buy ETF based in USA?
Any thought?
Hi guys! Thanks for all the great information about ETF taxation!
Just a question: how would a Germany-based ETF (ISIN DE…) behave from a L2WT point of view? Would there be a 28% withholding tax? And how much of that would it be possible to get back from Switzerland being a Swiss resident? Thanks in advance!
AFAIK you can use DA-1.
If it’s dealt with the same as a German stock (which it very likely is), you get 15% of that credited to your tax bill in CH (DA-1). The rest you have to get back from the Germans, which is more complicated & some costs involved (for documents u have to organise). To go for that rest probably only makes sense for a refund amount 500 and up.
Good summary with great examples. I love examples.
Thank you very much Ronaldinho! Very useful information!
Shouldn’t it be 26.375% (25% normal WHT rate plus 5.5% solidarity surcharge)?