Withholdingtax (35% on dividends), CH domiciled ETFs, non CH residents

Taxes
1

Hi all

I have an account with a Swiss broker (SQ), I invest in CH domiciled ETFs and every time a dividend is paid out, the broker applies the 35% withholding tax on dividends paid out. All clear so far as I reside in CH.

As I am planning to permanently leave CH (officially canceling residence / Abmeldung) and move to a country with 0% tax on dividends I was wondering if the broker (SQ) will still apply the 35% withholding tax on dividends paid by Swiss domiciled ETFs that I hold. Will the Swiss broker still apply the 35% withholding tax and then it is up to me to recover it? or by simply providing all necessary docs to SQ showing that I will reside in a different country (with 0 tax on dividend) will the broker automatically remove the withholding tax?

Thanks in advance

2

You can reclaim from the ESTV (depending on the applicable DTA).

Formulare zur RĂŒckerstattung der VST im Ausland | ESTV

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3

Thanks fr the info.

There is no way to avoid all this burocratic process and the broker not withholding the 35% at the first place?

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5

To my knowledge, it’s not possible to avoid or reduce the Swiss withholding tax right at the broker. However, I’m a Swiss resident, so maybe it’s possible in some countries and I’m simply not aware of it.

Also note that it depends on the double taxation agreement how much of the 35% you can claim back (if anything at all). Your new residence not taxing dividends doesn’t guarantee that you can reclaim the full Swiss withholding taxes. Similar to the US keeping 15% of dividends of Swiss residents, Switzerland keeps 15% of dividends of e.g. Dutch residents.

6

Thanks for the answer.

Is the process to recover part of the withholding tax smooth or the swiss authorities try all their best to slow the process and not return you the amount?

7

From what I‘ve heard, they aren‘t French or German or Italian.

8

I wished they were Singaporean (far more efficient than CH).

9

Withholding taxes on dividends are levied by the country where the company/fund is domiciled. It doesn’t matter which broker you use or where your broker is domiciled. The money will be withheld before dividends are paid out.

The only way to reclaim withholding taxes is if the country you reside in has a double taxation agreement with Switzerland which allows you to reclaim all or part of Swiss withholding taxes.

It’s exactly the same story with stocks and funds domiciled in the US or any other country which has a witholding tax on dividends. In many cases you just have to bite the bullet.

Does the country you are moving to (the one with no withholding taxes on dividends) host any good dividend ETFs?

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10

Thank you for the info Daniel.
No it doesn’t.