Withholding taxes on dividends apply to ETFs on equities and REIT from the US and Japan. Generally, for US equities, a withholding tax of up to 30% applies. Thanks to the tax domicile of our ETFs, the withholding tax on these dividends is only 15%. We have computed the effective foregone dividend income for three risk profiles under the following assumptions: equity dividend yield 2% p.a. and REIT dividend yield 3.5% p.a. We find the following results (values in % of the total portfolio value):
Foregone dividend income for
- risk tolerance 2.5/10: 0.02% p.a.
- risk tolerance 7.5/10: 0.10% p.a.
- risk tolerance 9/10: 0.14% p.a.
We are planning in the future to replace some of our ETFs with pension fund share classes of index funds for which this withholding tax can be further reduced to 0%.
