VWRL Ireland-domiciled ETF in CH broker - how to fill the tax form

Taxes
1

Hello everyone,

This is my first time filing taxes in CH, and I have a specific question.

I hold VWRL in a Swiss broker. This is an Ireland-domiciled ETF traded on SIX. The dividends are paid in USD. I read that Ireland-domiciled ETF has a withholding tax of 15% by US government. However, I cannot find this 15% on my broker’s statements, and my guess the reason is it’s held at the source instead of at the broker.

My question is - When filing the tax form, do I put 15% withholding or 0% withholding in the DA-1/R-US 164 form? If 15%, how do I prove it to the tax office?

Thank you for your help!

2

Not correct.

Your ETF is domiciled in Ireland and you‘re in Switzerland. The U.S. has no business in charging withholding tax on that ETF‘s distributions (…just because they may be paid out in USD. If that was true, the ETF would choose to do it in EUR or GBP instead).

You don‘t and you don’t enter it into either DA-1 or R-US.
You‘re not going to set off or „get back“ any tax in Switzerland.

Irish ETFs (when bought through a Swiss broker and held in a clearing system for you as a Swiss-resident investor) are subject to a withholding tax of 0% on their distributions.

And R-US is for the refund of a(n additional) Swiss withholding on distributions from U.S. securities. Which your ETF isn‘t - it’s Irish.

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3

As far as I know this withholding tax is paid by the ETF (not by you) to the US, and it is not recoverable.

4

Yep, one disadvantage of IR- vs. US-domiciled ETFs.

5

Still not quite correct.

U.S. withholding tax is only withheld on distributions from U.S. stocks only to that Irish ETF.

Does that ETF hold British and other stocks? Yes!
Does the ETF pay U.S. withholding tax on their distributions? Flippin‘ no!

The ETF hold stocks from many countries - and the U.S. is just one of them (albeit the largest one by far).

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6

Yes, this precision is correct, as this specific ETF follows a worldwide index.

7

Thank you for your response. I understand now that I should put 0% withholding tax. But I still need to report I received dividend in the tax return, no? Do I just enter it into DA-1 and say it’s subject to 0% tax withholding? If not, do I report it in a different section along with my Swiss securities?

Thank you!

8

I think so but be careful about picking the right column, Swiss securities have a column of their own because of the 35% WHT and it doesn’t apply to VWRL.

VWRL has nothing to do with DA-1 since there is no withholding tax on the ETF distribution, and you pay income tax on it. The tax software should directly fetch the taxable distribution amounts online and it should also put them in the right column.

Some tax software automatically asks whether you want the security to go into DA-1 or into the global Verzeichnis, but I think it only does that if there is something withheld. For VWRL it probably will not even ask.

9

Of course :slight_smile:

Even if you don‘t actually receive the dividend when it is reinvested in accumulating ETFs.

No, DA-1 is for setting off („refunding“) foreign withholding tax (which there is none) on that security‘s distributions.

You just enter it into the main, mandatory part of your tax return - it should be a distribution not subject to Swiss withholding tax („Verrechnungssteuer“).

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10

I have one question that I couldn’t figure out a proper answer

If I have 100 Shares of VWRL on SQ and I transfer 50 of them to another broker (for example IBKR), how exactly should I declare this on Zurich Privat tax return online?

I see following options

  • kauf
  • gratisaktie
  • aufteilung
  • Fusion
  • Abspaltung
  • schenkung
  • erbfall

But there is no option for Transfer of positions.
Does anyone know what exactly should be selected as option while declaring a position.

11

they won’t care what you put.

(personally I use Kauf when I do a transfer, but it won’t matter)

edit: also in many case you could keep the single position across two brokers in one line. I don’t do that because my US domiciled ones have different withholding between CH and non-CH brokers though.

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12

I see. I didn’t know that it doesn’t matter if the position is at broker 1 or broker 2…

So let’s say , for VWRL since there wouldn’t be any tax deduction at source, all that matters is what is the total number of shares across the brokerage accounts?

13

Yes they’ll only care about total position and dividends.

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14

Why dont you simply report the total value of Portfolio 1 and Portfolio 2 at year end ?

This practice is widely accepted in Switzerland. Not in Zurich?

15

@Guillaume_GVA
As far as I understood Tax office guys tolerate this but don’t really like it. So I am just trying to be nice person.

16

None of the ones listed.

If you prefer to separate the positions, I’d just delete the one position and enter two new positions.
They’re only asking for “Zugang 2023” and “Abgang 2023” in their PDF forms.

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17

Just to be sure to understand what you mean

Let’s say position on 1.1.2023 = 100 at SQ

Position on 1.7.2023
50 at SQ
50 at IBKR

You are saying , I should simply do following

  • sell 100 on 1 July 2023
  • buy 50 + buy 50 on 1 July 2023

?

18

In this case, I don’t see what is there to declare. You had 100 shares, you still have them. No changes.

19

That is what was not clear to me originally.
Declaration is not about position at a broker but position across brokers. Right ?

Hence no declaration.

20

No buying, no selling. You didn’t buy or sell.

Just enter two new positions with 50 units apiece. Instead of a buy, you enter 50 units as end of previous year/beginning of tax year „balance“.

Agree. I just prefer to list things separately as it’s easier (visually) to keep track of the brokerage accounts.

Edit: also what @nabalzbhf said