Hello,
I am interested in investing into Global Stock Index Fund - EUR Acc (VANGEIS) IE00B03HD191 on IBKR in Switzerland and was wondering if the withholding tax will be still charged for this accumulating fund after completing the W-8BEN form?
Thank you!
This is a fund with an Irish domicile. US tax forms such as W-8 BEN are irrelevant for funds with a non-US domicile.
There will be no withholding taxes on dividends from the fund (assuming the rules are the same for ETFs and mutual funds with Irish domicile). You will have to pay Swiss taxes on the accumulated dividends of this fund.
The fund will internally pay withholding taxes on dividends of some of the stocks it holds, to the corresponding company domiciles, but you won’t be able to get a tax credit on those.
BTW: I think you wouldn’t even be able to buy it at IBKR. I see the following disclaimer:
Trading Restricted
Limited to Professional Investors only. Prior approval from Vanguard Asset Management Ltd is required to trade these funds. If you are an institutional investor, please contact distributor_management@vanguard.co.uk to request approval. No trading from retail investors will be accepted.
I’d suggest investing in an ETF instead, either VT or an Irish-domiciled world ETF.
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Thank you so much Jay. I also just saw this disclaimer as well, which is a pity.
The reason I am looking into mutual funds vs FTEs is that I will be probably moving to Spain at some point where mutual funds do not trigger capital gains taxes when changed to other mutual funds, but ETFs do.
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Just sell all (or only sell the positions with gains on them) before moving then? And re-buy in Spain. We have no capital gains taxes in Switzerland.
You should do that anyway to reset your tax basis to 0 (for teh positions with gains). Else you pay taxes on your accumulated gains here later down the line.
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I guess I will have to pay tax on accumulated gains in Switzerland for the period of time when I am still a Swiss resident and once I become the Spain resident, the Spanish taxes would apply.
We dont have any taxes, so no, zero taxes to be paid. Again, just sell when you are leaving and still tax resident in CH. Then either directly invest in the future product you want to have in Spain (therefore resetting the tax basis) or take the cash and invest once resident in Spain.
Even dividend taxes for accumulated dividends (if you currently hold accumulating funds) are not applied, if you sell before the date when ictax would mark them as paid. As this is a one time thing, no issue here.
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