Tax optimisation for ETF investing

Well I’m not actively seeking out growth here, its just a byproduct of me seeking lower tax drag. Hopefully in the long run the value from Berkshire and growth from VUG act as good diversifiers.

Not sure how wrapping investments into a company would be more tax efficient. I assume its quite a lot of hassle and with a structure like this there isn’t much tax drag already.

As far as leaving Geneva, I’m sure I will at some point. I have a great job here for now but if an opportunity in a Zug/Dubai/Singapore came about then the tax savings would likely more than justify it.

I believe it’s common that EU domiciled funds track a benchmark “net of worst-case WHT”, ie not considering potential tax treaties. For US exposures, the BM provider would hence assume a WHT of 30%. That’s my understanding when I checked a few ETF a while back on Bloomberg. Not sure on the US ones. I had a look at the VT factsheet and it seems it tracks a benchmark that considers only WHT at the fund but not investor level. Eg the US part would be assumed to be subject to 0% WHT.

This seems also consistent with fund performance. IE domiciled ETF tracking US heavy benchmarks (such as “All World”) often beat their BM as the index assumes 30% WHT for US while the fund only pays 15%. VT in comparison is almost precisely 7bp below the benchmark, reflecting that it very closely tracks the BM, except for fees…

If you might leave at the drop of a hat, a company is not so useful, I agree. A company needs a local representative. Moving a company cross-border probably means lawyers.

It’s not thaaat complicated. Hairdressers and carpenters manage. For a small company, you only need to do accounting and pay taxes on it. For very simple buy and hold, some Excel table will do. Filing taxes doesn’t differ much from doing your own taxes. Founding costs start at 400 CHF at

Fringe benefits: It can domicile where you live and help pay rent. You can sell some of your work through your company (less protections, less taxes, duties, and contributions). No fear of professional trader status. Buy and sell all the options, get tax credit on losses. Have some insulation between you and your leveraged investments.

Looking at taxes: Even Geneva taxes below 15%. A company also pays capital gains tax. And you additionally pay tax on dividends you take out (which are reduced for major shareholders).

But yes, for low dividend stocks portfolios that is not that attractive, since you pay nearly no taxes to begin with.

Looking at MSCI ACWI gross returns (should likely be net) since 1988:

In company Directly
Taxed Total Gross Dividends Gross
Since 1988 p.a. 8.21% 1.96%
Tax 15.00% 50.00%
Drag 1.23% 0.98%

And you would still have to pay additional taxes to take the money out of the company. Ahh… Geneva and their 50% tax wins. :sweat:

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Thanks for crunching the numbers.

In the end in Suisse Romande I think you just have to go for as much capital gains as possible. Any dividends or bonus taxed at marginal rate is just a big cost of working here.

Does exist an etf replicating S&P or VT but without any taxable income ( last column of Ictax ) ?
Like boxx for the us bill

Not really, and if there was a popular one, ictax would probably eventually invent a virtual dividend, like they do for accumulating etfs.

There are some Canadian Horizon “total return” etfs. But you‘ll likely have unrecoverable withholding tax layers with that (or maybe not, as they are synthetic, haven‘t looked that deep into them), so probably not worth it and might be eventually taxed, who knows.


There is one in ictax for example

Should be this one

There is however a swap fee integrated of “no more than 0.3%”
Which can be quite a bit.

But actually on second thought might be interesting. I‘ve looked those up in the past, but did not dig deeper. I‘ll need to have a closer look on those.

They do have various other total return etfs also: CORPORATE CLASS | TOTAL RETURN INDEX ETFS - Horizons ETFs

But those are not in ictax.

On another glance, it says this in ictax " * (I) The taxable earnings could not yet be identified andbe determined later."

But it says that even for 2022, cant imagine they 2 years to determine that. I wonder what you do in such a situation for your tax declaration?

But I think you see the potential problem.

EEE: for 2021 it was 0 taxable income: ICTax - Income & Capital Taxes

There may be some IE or LU domiciled swaps based UCITS that might have zero income. Not sure about their cost structure though. And also is they track gross or return returns of jndex.

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My limited research so far seems to conclude that there is always some significant cost involved.

For example apparently for the Horizons etfs the swap fee of up to 0.3% is to reimburse the swap counterparty for the withholding taxes.

In the end depending on your marginal tax rate, there might still be a tax benefit.

ICtax always takes into account dividends of the accumulating ETFs using swap on the european market (UCITS ETFs).
Not sure why it is not the case for these canadian ETFs.

No one in Switzerland holds these Canadian ETFs.

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