# Taxation in Switzerland: Mustachian Know-How, Best Practices **URL:** https://forum.mustachianpost.com/t/taxation-in-switzerland-mustachian-know-how-best-practices/75 **Category:** Taxes **Created:** [November 6, 2016, 8:36pm UTC](https://forum.mustachianpost.com/t/taxation-in-switzerland-mustachian-know-how-best-practices/75 "2016-11-06T20:36:16Z") **Posts on this page:** 1 **Showing post:** 14
### Author: ![ElMago](https://forum.mustachianpost.com/user_avatar/forum.mustachianpost.com/elmago/32/37_2.png) [@ElMago](https://forum.mustachianpost.com/u/ElMago) #### Post date: [March 14, 2017, 8:20pm UTC](https://forum.mustachianpost.com/t/taxation-in-switzerland-mustachian-know-how-best-practices/75/14 "2017-03-14T20:20:36Z")
> [@nugget](#): > > The great things about Switzerland is that capital gains are fully tax-free! This makes investing in Switzerland insanely attractive. This only applies to private investors. Unfortunately, it is not up to you to say whether you count as a private or professional trader. According to [moneyland.ch](http://www.moneyland.ch/en/stock-market-profits-tax-free): * * * **The tax authority applies these 5 criteria** The Swiss Federal Tax Administration FTA has set five criteria. If you want to make absolutely sure that you are exempt from paying taxes on your capital gains, you need to fulfill all of these five criteria together: 1. You have been holding the securities for at least 6 months before selling them again. 2. The volume of your transactions during one calendar year – that is the sum total of the purchase and sales prices of your securities during the tax period – is no more than five times higher than the total value of your assets and securities at the beginning of the tax period. 3. You do not depend on the profits from trading your securities in order to finance your household expenses. Rule of thumb: the profits from trading should make up less than 50% of your total net income during one tax period. 4. You are not borrowing money in order to buy securities. Or in other words: the taxable income you receive on the investment – like interest payments and dividends – exceeds debt interest payments. 5. In case you are trading derivatives, particularly options, you may only use them to hedge your own securities. It is worth noting that the tax authority can use a good deal of discretion when applying these five criteria. It can thus happen that you do not count as a professional trader – and therefore pay no income tax on your profits – even though you are falling under one or more of these criteria. * * * More detailed information in German can be found here: [STEUERFREIER KAPITALGEWINN Schwierigkeit der Abgrenzung: steuerfreier Kapitalgewinn versus steuerbares Einkommen](http://www.wengervieli.ch/getattachment/2b57d10e-d7ad-4255-af98-a68bf240561c/Steuerfreier-Kapitalgewinn.aspx) **Conclusion** If you reach FI and make a living selling your shares, you can be classified as professional trader and have to pay taxes on capital gains. --- _[View the full topic](https://forum.mustachianpost.com/t/taxation-in-switzerland-mustachian-know-how-best-practices/75)._