Withholding tax for non-US companies in US ETFs


I am swedish but living in Switzerland. As I might want to return to my home country (although probably not) one day I consider adding a certain percentage of my portfolio to swedish stocks. I am now looking at different possibilities of achieving this. One possibility would be to buy an ETF with domicile Sweden, the problem is that these are all accumulating, meaning that I every year have to ask the swiss tax authorities to calculate the dividend tax for my case. A second possibility would be to buy MSCI Sweden (EDW). However, what I don’t understand is if america ETFs are able to reclaim withholding tax for the european stocks. I’ve been trying to read through the documentation and I found this:

To me it looks like I won’t be paying any extra source tax in Sweden. I realise this is a very specific question for Sweden but it must also apply to when you invest in for example VT, as 40% of the positions are non-US. So if you hold VT you are paying source tax to the netherlands that you can’t recover but not to France. So for example if you want to invest in dutch stocks it would be very stupid to go through the US. Is this correct?


If the fund is entitled to a double tax treaty benefits, the fund provider may place tax reclaims in the various countries of investments.

It seems Vanguard is doing it for VT, but we do not have any details.

(page 88/104 of the last VT’s annual report)

Dividends are reported net in the statement of operations (page 83)


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Don’t they usually keep the added securities in the database (and automatically update them) in the following years?

I see the Irish-domiciled iShares OMX Stockholm Capped UCITS ETF in ICTax of 2021 and 2022. It’s also in 2023 without a value but I would assume that gets updated early 2024 without an extra request.

I haven’t checked the details for these countries but in general, yes, VT has to pay source taxes for dividends from stocks of some countries but not all.

And it’s definitely possible that Sweden doesn’t have source taxes for US-domiciled ETFs. In which case a US-domiciled ETF could be considered. However, I would still avoid it as you’re still paying 15% US WHT for no good reason, even if you can get a tax credit in Switzerland for that. Also, if you really move back to Sweden or another EU/EEA country, a US-domiciled ETF would likely not be the best choice.

As a rule of thumb (not particular to Sweden), I suppose this is probably similarly ä tax-efficient or better than investing through a fund domiciled in a third country.

Important note: …assuming that you get proper tax figures for the fund acceptable to your Swiss tax authority.

…in that case and at that point.

Since Sweden seems to (regularly) levy capital gains taxes on individuals, you‘d sell your stack of VT before your move anyway. Thereby realising capital gains tax-free while still being resident in Switzerland (can we please do without the professional investor thing this time?)

Wow, I don’t understand how I missed this ETF, I guess I always googled Sweden and not Stockholm. This one also has much lower TER than EWD. At a first glance it seems to solve my problem. Thanks!

Yes, but as there is not capital gains tax in Switzerland I could just sell them and transfer to whatever is best in Sweden?

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My more high level comment would be: I am not sure what you really want to achieve with having a “pro-active home bias” here. I’d diversify as much outside of CH and SWE to not over optimize for any specific (small) country. If SWE does much better as a country than the global markets then at the point of return you will likely be rewarded with a better living standard and healthy public finances, if it does worse than the global markets then you’d be happy that you diversified. So for me it’s hard to see a case where you want to create an artificial home bias.

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If Sweden does much better than global markets it will make it harder for me to move back. A swiss person moving away from Switzerland 20 years ago (to for example Sweden) and not having any swiss equities in his/her portfolio would probably find it very difficult to move back just from the chf appreciation alone. I see it as kind of an insurance policy.


Not really. The returns of a Swiss equity have been pretty similar to a World equity portfolio, even (especially!) when measured in the same currency (see MSCI Switzerland, for example).

The difficulty doesn’t lie so much in equity return as rather in differences in net wage/income levels and (possibly) real estate prices and cost of living.

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I feel this is a tiny bit more emotional than fully rational, but I can totally understand why this sometimes matters to keep (emotional) doors open.