Taxation in Switzerland: Mustachian Know-How, Best Practices

[Bibi4]

Here all all the rules

More precisely this typical rule:

Capital gains generated through securities trading do not account for a significant portion of your basic income. The rule of thumb: Capital gains should account for less than 50 percent of your net income.

Which could well be reached if you sell just a few bitcoins theses days

[nabalzbhf]

Check the law/circular/jurisprudence, there are pretty clear guidelines. The 50% rule is for the safe harbor.

[Cortana]

Don’t frighten people with whose name shall not be written here. You know that “professional trader” is like Voldemort for Mustachians?

[Scrooge]

What i have understood regarding the professional trader status, tax authorities are rather cautious giving that to a person, because it means that you will also get to deduct your losses from your income

[SwissDan]

Indeed, I don’t know anyone that got professional status. Does anyone on the forum know someone?

[dbu]

Are owned (not leased) vehicles subject to (wealth) taxation, and do you report them in your tax return?

[jay]

@nugget

• “Einfache Staatssteuer”: you have to dig your canon’s tax tables to find that. Depends on income, marial status, Kids, confession,…
• “Gemeindesteuer”: take your Statssteuer and multiply it wit the Steuerfuss of your Gemeinde

A missing bit is that the canton also has a “Staatssteuerfuss”, i.e. the effective “Staatssteuer” or “Kantonssteuer” is “einfache Staatssteuer” multiplied with the “Staatssteuerfuss”. In ZH it’s currently 100%, so it doesn’t change anything there. However, this may change again at some point and there are cantons where it’s not 100%.

The ESTV link above is dead. Working link with multipliers for cantons, municipalities and church: Tax multipliers

@nugget

Switzerland makes you pay incredible 35% Tax called Verrechnungssteuer when these incomes happen. You are then intended to declare these incomes with your next tax declaration, where the difference between the upfront Verrechnungssteuer and your income tax will be refunded.

The above sounds like you always get a lot back. 35% is often not far off from the marginal tax rate and the highest marginal tax rates in Switzerland are above 40%, depending on your residence and income.

@nugget

Foreign dividends are not taxed. Be sure you still declare them, because legally they are an income that you must declare.

Foreign dividends are taxed the same as dividends of Swiss stock/funds. You may get a Swiss tax credit/refund for foreign withholding taxes (DA-1) but in total you never pay less in taxes compared to dividends of Swiss stock/funds.

@nugget

Stamp Tax (Stempelsteuer)

A note would make sense that this only applies to Swiss brokers.

@nugget

Wealth tax is typically of the order of 0-2‰. in zurich it starts with zero at 77’000, CHF 300’000 are taxed around 0.4‰ (CHF 115) and the 1‰ mark is somewhere above CHF 1’000’000.

This is missing the multiplication with the sum of “Staatssteuerfuss” and “Gemeindesteuerfuss”. I.e., in Zurich CHF 300k is taxed at about 0.8‰ (CHF 250) a year and CHF 1M is taxed at about 2.1‰ (CHF 2’100) a year (marginal wealth tax rate of 3.3‰).

[rolandinho]

@dbu

Are owned (not leased) vehicles subject to (wealth) taxation, and do you report them in your tax return?

Very variable,depending on your Canton.

Steuerwert eines privaten Autos. Kantonaler Vergleich

BS - 0 (reasoning - it’s an object that one uses, like a TV or a Sofa and thus not “wealth”)
SZ, ZG - actual market value (approx)
Others - somewhere in between

[DalFonso]

What about the taxable value of a rented property? Does anyone have experience? Is it the purchase value plus depreciation?

I want to engage a tax accountant this year since we purchased a new property but it seems like the only point I need help with is how to report taxation regarding owning a rental property.

[Guillaume_GVA]

@DalFonso

since we purchased a new property

Where is the property located ? Switzerland (which canton) or abroad ?
In which canton do you live ?

[DalFonso]

Property in Zurich and we live in Zurich

[Dr.PI]

You should have gotten a document from the tax authority stating the fiscal value of your property. This is the value that you should declare.

[DalFonso]

Clearly I didnt get it. Would anyone which department I should contact?

[Wolverine]

That would come from your Gemeinde/commune/comune, there should be a taxation comittee that you can find on their website, or you can reach directly to the cadastral office there.

There may be a delay, and they may (?) not issue it automatically if it isn’t a new construction/renovation with a change in taxation value. They’ll be happy to provide you with it if you ask.

[DalFonso]

Thanks to your tips, I found a form (for Zürich only) that I can use to estimate the taxable value of my property. I will attach it to my tax return. It looks like it’s the annual net rent/7.05% for rental properties. If it’s a new building in which you live in and there’s not enough data, you can use 70% of purchase value.

Hilfsblatt_zur_Berechnung_des_Vermoegenssteuerwertes.pdf

Info:
https://www.stadt-zuerich.ch/fd/de/index/steuern/natuerliche-personen/steuererklaerung.html#liegenschaftenbewertung

[nkbhnomfcmmwxdlula]

Are SWAP (Synethetic ETFs) more tax efficient for Swiss residents?

[leman]

@nugget

Foreign dividends are not taxed. Be sure you still declare them, because legally they are an income that you must declare. No guide on the grey zone of tax evasion should be given here BUT: due to double taxation treaties (Doppelbesteuerungsabkommen) they might not need to be declared 100%. To find out exactly, check the official tool.

As we say here in Vaud, un doute affreux m’assaille! Did I declare my taxes incorrectly all those years?!
I realise that ICTax calculates a taxable income alreay taking into account the US withholding tax.

I reported gross dividend and withholding figures from IBKR. Let’s take a random example: Ticker USXF, ISIN US46436E7673.

What IBKR says:

Parts held on 31.12.23: 33740
Dividend: Fr. 14204.10
Withheld: Fr. 2130.60
The difference would be Fr. 12073.50

What ICTax says:
Gross return minus VSt. into CHF: 11364.63

• Is this difference only due to the official exchange rate?
• Was I wrong to declare figures from IBKR instead of ICTax? Should I send a correction?
• In general, should I stick to declaring ICTax amount and forget about the withholding tax?

Note: My marginal tax rate is higher than 15%

[Abs_max]

If you declared dividend income based on IBKR dividend reports, then you should be fine. ICTax is doing same things - just using exact exchange rates and dates.

Main number to match (or closely match) Dividend income (gross) I.e before deduction

For example -:
Dividend paid 100 USD
Tax withheld 15 USD (if you used correct W8BEN)

You declare 100 USD in your return and claim 15 USD tax credit. This is via DA1.

[Abs_max]

@leman

Note: My marginal tax rate is higher than 15%

It was clear based on #of shares of MSCI US held

[leman]

Thank you very much!
I said it was a purely random example with random figures