Tax when buying foreign securities

Taxes
1

Hi everyone !

I am maybe going to ask a stupid question but as Im new in Switzerland I prefer to risk looking stupid than having bad surprises later :slight_smile:

If I buy, lets say through swissquote, an ETF, bond or whichever security that is outside of switzerland for example shares quoted in a foreign stock exchange or bonds from US gvt. am I taxed differently vs swiss securities.

I understand this can be the case regarding dividends reading other posts. Is that right ?

What about Vermögensteuer, is it the same ?

Any other tax I need to know related to the investment (assuming Im not investing professionally)?

Thanks in advance for your kind advice !

Aitor

2

hey @aitormm,
nice you found this place, you will find informatino :slight_smile:
read this and this and then post again if you still have a question!

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3

Dear nugget thanks for your reply, it is still however not clear to me if the Vermögensteuer applies with the same value to an ETF in SIX and another in NYSE for example when using SWISSQUOTE to buy them.

For example in Italy foreign and national capitals is taxed completely different !

Regards

Aitor

4

The broker or exchange where you bought the stock has nothing to do with the domicile of the stock. If your stock is US-domiciled, then it has the US00000000 ISIN, IE for Ireland, CH for Switzerland etc.

In Switzerland you pay the wealth tax on your worldwide wealth, and as far as I know, it all counts the same, regardless if it’s in Switzerland or abroad.

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5

the posts @nugget linked should contain all the infos you need.

No difference in Vermögenssteuer.

You can have differences in Stempelsteuer (this depends on broker, Swiss vs foreign) and Withholding tax (this depends on funds domicile, see examples L1WT/L2WT in the second post)

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6

Thank for your answers, its much clearer now. However, a new doubt has come to my mind.

With regards only to foreign stocks capital gains, I understand there is 0 tax here in switzerland but could we be tax-liable to the foreign country ?

Thanks !

Aitor

7

In theory any country could try and tax capital gains made by non-residents of that country but in practice I don’t think any do so (for small shareholders) while it is hard to be definitive without going through each country, I think your pretty safe of foreign governments levied capital gains tax.

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I just found this link while I was checking for US

If you go to " the 30% tax" paragraph, it looks like while for holding shares or capital gains in shares it shouldn’t be any tax other than on dividends, apparently there is a tax on capital gains for obligations if purchased at a discount…

9

Thought so too but then how come e.g. Amundi Physical Gold ETC ISIN is FR0013416716 but its domicile is Ireland and not France?

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10

Nice catch. I checked the definition of ISIN and it says the first two characters are for the country of the issuer, not the domicile of the security. You never stop learning…

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11

Don’t tell me!

But then, from a taxation point of view, do you know if my example ETF will be taxed as an irish or a french security?

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The fund domicile will surely be stated somewhere, on a factsheet for example. Thats the country that will be relevant for taxation.

Edit: the fund domicile is Ireland per the Amundi website, so thats the country you will have to use for determining what taxes arise where.

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13

dear Nugget
thank you for the substantial contribution in clarifying an intricate but crucial matter.
the NZZ article was exactly what we need, but it is backdating to 2014… does anybody has an updated source?
ideally, we would need a summary of taxes levied by main countries on capital gains, income from dividends and income from interests.
however can produce it will be called a hero and a scholar.

14

An overview of foreign withholding taxes on dividends and interest is available here:
https://www.estv.admin.ch/estv/de/home/internationales-steuerrecht/fachinformationen/quellensteuer-nach-dba/auslaendische-quellensteuern-pro-land.html

I’m not aware of any country that levies capital gain taxes on stock, funds or other “bewegliches Vermögen” from people whose sole tax residency is Switzerland. The only exceptions I can think of are countries that tax their citizens even if they live abroad (e.g. USA) and countries that impose certain taxes even after moving to another country (e.g. Sweden).

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