Taxes on other country bonds

Taxes
1

Hey,

Starting with the fact that I live in Switzerland for a little more than a year, I managed to collect a lot of CHF, which I would like to start investing in ETFs, I got acquainted with the article : ‘Swiss tax guide for investors in EFTs’ for which I thank you very much although it is still quite complicated for me because my QST tax is collected every month by the employer as I have a permit B. So I have no idea how it can be recovered after QST. Does it only work for people who pay each year?

The second thing is that I plan to buy bonds in Poland (as I come from), because I have some money in the local currency and in order not to lose money on currency conversion, I decided to buy safe bonds. And in Poland it is quite simple as there is a tax on capital gains is 19%. Now my tax residence has changed and I have no idea how it will be settled or whether it makes sense.

I would be grateful for any clarification.

2

Well, think again.
  

3

Given how inexpensively you can change currencies, that’s not a good reason to buy PLN bonds.

You are going to be taxed on the higher PLN interest rate (and interest income) versus the lower rate and income in CHF. If you believe PLN will appreciate against CHF (which, historically, it hasn’t very long or often) or depreciate less than the interest rate differential suggests, that may be a good idea and motive to buy and hold such bonds. Also, if you have to have a certain amount in PLN at a certain point in time, e.g. to pay back a debt or buy a house. But saving on currency conversion IMO is not.

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4

You still have time to open 3a account and pay in, if you haven’t done that for this year.

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5

If your wealth is above some threshold (70k?) or you earn more salary than 120k or you have more non salary income than Xk (forgot number), you still have to fill your taxes (might have to ask tax authorities for that.

And even if you don’t fulfill that you can also ask (eg because you want to deduct things).

6

Yes, I did not write that I am talking about double currency exchange, because my main goal is to get out with money from bonds or ETFs (at the appropriate amount) and to buy real estates in Poland.

7

I don’t earn >120k and I read that re-calculating QST tax and deducting payments on 3a may not be profitable in most cases.

8

These things are very dependent on local taxes etc. You should run numbers for your situation anyway.

Another variable that is missing in your story is how long are you planning/able to stay in Switzerland.

9

Are there any calculators that can help me calculate/simulate this? I’m 27 years old and I don’t plan to move out of Switzerland for sure to retire, I don’t know what will be after that.

10

Have you already seen this thread? Capital gains in Poland - Swiss tax residency

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11

And in Poland it is quite simple as there is a tax on capital gains is 19%. Now my tax residence has changed and I have no idea how it will be settled or whether it makes sense.

Whether buying Polish government bonds is a good idea or not, is separate topic, including your future plans (you mentioned real estate in Poland) etc, but if you ask about taxes then:

  1. Yes, you will be paying still by default 19% Polish tax on interest rates.
  2. Till some amount of such income from dividends (and till your total income does not reach 120k), you do not need to fill Swiss tax return, thus it will not be taxed in Switzerland.
  3. You can provide to Polish institution (the broker of your government bonds: PKO or Pekao) the Swiss tax residency certificate, which you can get for free from cantonal tax office. The broker might ask for certified translation to Polish (see the other thread mentioned by jay, PKO BP BM accepts English one). Then you will pay 5% in Poland and this income will be reported to Swiss tax authorities. I think in such case you should fill a Swiss tax return, but who actually knows… if the amount is small maybe Swiss won’t care? This is getting tricky and too close to actual tax advice. If you ever fill Swiss tax return, then obviously you would need to declare that income thus pay Swiss tax on it (minus 5% Polish tax credit).
12

Doesn‘t have to be income from dividends only - could also other income (self-employed job, even if part-time, etc.). Also, wealth (e.g. 80’000 in Zurich) may alone trigger the requirement to complete a tax return, even in the absence of income derived from it.

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