Swissquote vs Etoro

Hi everybody,

I have recently started working and for this reason I am starting to invest more money than  how I used to. It is years that I am using Etoro, however I heard many people saying that Swissquote, if you are in Switzerland as I am, is a really good option. I am not really into the differences between the different brokers/banks and so I am asking in this forum to have a more expert opinion on that. 

As an investor, I do long-term investments in mainly US stocks, and my plan now that I have started working is to invest between 1'500.- and 2'000.- per month. 

So my question is: which solution should I use for my investments (also other solutions are accepted)? Which are the different benefits that each option has (e.g. if Swissquote (I don't know if this is true) manages the taxation on your investments by itself)? 

Thank you very much for the help and please give me details on which I can then take a decision.

The pros of sticking with eToro are:

1. No Swiss stamp duty. You only pay Swiss stamp duty when you use a Swiss broker. Depending which eToro broker you use, you may pay a samp duty in the country it's domiciled in.
2. Lower brokerage fees. If you use eToro UK or Europe, you don't pay a brokerage fee for long stock position, as long as you don't use leverage.

The cons of sticking with eToro are:

1. Withholding tax. If you use US eToro but live in Switzerland, your dividends are subject to US withholding tax. You can claim part of it back by submitting a form which you should get from eToro. I believe the situation is similar for eToro Europe/UK. Either way, you will either lose part of your dividends or, in the best case, put a lot of effort into reclaiming them. In Switzerland, private investors don't pay taxes on dividends. If you are a dividend investor, this is a consideration.
2. Less access to Swiss markets. Swissquote lets you access niche Swiss stocks, like those listed on the Bern exchange.

If your main activity is buying US stocks for the purpose of reselling them, stick with eToro for that - in my opinion.

Benefits of using a Swiss broker:

If you buy to hold in order to earn dividends, using a Swiss broker would, in my opinion, be a better long-term option because you won't lose money to foreign dividend withholding taxes and won't pay tax on dividends here (assuming you buy stocks maybe once a month so you qualify as a private investor). If you hold very long-term, Cornertrader may be a better option as they don't charge custodial fees (but charge higher brokerage fees than Swissquote).

If that's the case, just use the comparison to find out what makes sense for you:
https://www.moneyland.ch/en/online-trading-comparison

Possible added benefits for you as a Swiss resident are bank customer privacy, the Swiss bank depositor protection scheme, the option of detailed tax statements designed for Swiss tax purposes, Swiss consumer protection laws, access to more Swiss stocks, local customer support and educational events.

antonio wrote on January 27, 2020

The pros of sticking with eToro are:

1. No Swiss stamp duty. You only pay Swiss stamp duty when you use a Swiss broker. Depending which eToro broker you use, you may pay a samp duty in the country it's domiciled in.
2. Lower brokerage fees. If you use eToro UK or Europe, you don't pay a brokerage fee for long stock position, as long as you don't use leverage.

The cons of sticking with eToro are:

1. Withholding tax. If you use US eToro but live in Switzerland, your dividends are subject to US withholding tax. You can claim part of it back by submitting a form which you should get from eToro. I believe the situation is similar for eToro Europe/UK. Either way, you will either lose part of your dividends or, in the best case, put a lot of effort into reclaiming them. In Switzerland, private investors don't pay taxes on dividends. If you are a dividend investor, this is a consideration.
2. Less access to Swiss markets. Swissquote lets you access niche Swiss stocks, like those listed on the Bern exchange.

If your main activity is buying US stocks for the purpose of reselling them, stick with eToro for that - in my opinion.

Benefits of using a Swiss broker:

If you buy to hold in order to earn dividends, using a Swiss broker would, in my opinion, be a better long-term option because you won't lose money to foreign dividend withholding taxes and won't pay tax on dividends here (assuming you buy stocks maybe once a month so you qualify as a private investor). If you hold very long-term, Cornertrader may be a better option as they don't charge custodial fees (but charge higher brokerage fees than Swissquote).

If that's the case, just use the comparison to find out what makes sense for you:
https://www.moneyland.ch/en/online-trading-comparison

Possible added benefits for you as a Swiss resident are bank customer privacy, the Swiss bank depositor protection scheme, the option of detailed tax statements designed for Swiss tax purposes, Swiss consumer protection laws, access to more Swiss stocks, local customer support and educational events.

Thank you for your exhaustive answer! I am now going to research the point you highlighted to have an even clearer understanding and then I'll probably come back for some questions. Thank you very much!

Ciao Nicolo

So you have been using eToro in Switzerland... I was wondering if you could help me with a question on taxes, please. I opened an eToro account this year and started making use of their social trading, which triggered thousands of transactions. Now I am afraid I did a terrible mistake! Because I hear you have to list in the tax filing every asset that paid a dividend. Also with ETFs that reinvest the dividends, you should enter specific purchase info, time and dates, and valuation (because they want to tax those dividends). As if that were not enough, various investors I copy used leverage, sold before reaching 3 months, invested in leveraged crypto, etc. And all that was automatically replicated, so I might count as a 'pro' investor... I am afraid I am screwed and wonder how the hell I can file my taxes with such a long list of transactions. Any advice?

Grazie

Eze 

Well, you only need to report the stocks you owned at the end of the year (December 31), and stocks on which you earned dividends.

You can find the individual dividends and the stocks/funds which paid them on your eToro account statement (in "settings") under "account activity." It would be nice if they had a fliter option, but as it is now you have to search for dividend to find those entries. It's a bit of work, but that's the only way to do it, and it doesn't take that much time.

AFAIK, whether or not you used leveraged positions makes no difference in tax reporting.

I wouldn't worry about being classified as a pro investor unless the amounts involved are significant i.e. you are actually earning a substantial income through investing.