Swiss Tax Declaration for ETFs Bought Through Foreign Broker

Is it legal for a resident of Switzerland (not a U.S. or Swiss citizen) to buy ETFs in other countries using online brokers? The custodial fees in Germany and the U.S. are lower than those in Switzerland. How should these ETFs be declared in Switzerland? Would I have to pay Swiss stamp tax and withholding tax on ETFs purchased abroad? What are the pros and cons of buying ETFs abroad through a foreign broker?

Thanks

Hi there,

moneyland.ch is not a tax advisory service, and you may want to consider consulting with a tax advisor which specializes in investment products.

We asked the Federal Tax Administration for information on this topic and representatives referred us to article 17 of the federal law governing stamp duties which states that Swiss securities brokers are required to pay stamp duties. Because foreign securities brokers do not qualify as securities dealers as defined in article 13 of the same law, they are not obligated to pay stamp duties. Swiss investors (private or professional) who do not qualify as securities dealers are not obligated to declare or to pay stamp duties either.

With regards to the anticipatory tax on interest and dividends, the Federal Tax Administration stated that this must be withheld by the entity which pays out the taxable interest or dividends as per article 10 of the federal law governing anticipatory tax. If an entity domiciled in Switzerland pays out a dividend to an investor, the onus rests on the entity paying out the dividend to withhold the 35% anticipatory tax and transfer it to the Federal Tax Administration. The resident of Switzerland which receives the dividend can claim a tax refund if certain conditions are met as per article 21 of the anticipatory tax law.

Best regards from Moneyguru

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