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  #41  
Old 21.04.2014, 22:54
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Re: Low Cost Broker with no Regular/Custody Fees

I am as well very much interested in this topic and especially the way the withholding taxes on dividends are managed by Interactive Brokers. I believe things must be easier with Corner Trader as they are a Swiss Bank.
For instance is IB able to correctly handle the double tax treaties for non-US equities, e.g. German-US / US-Swiss for German equities ?
All input warmly welcomed.
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  #42  
Old 22.04.2014, 10:31
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Re: Low Cost Broker with no Regular/Custody Fees

I think with IB (I don't have an account) you just fill in a W8BEN form which IB then shows the IRS, they withhold the minimum 15% for US equities (this is withheld even if you have an account in Switzerland, as far as I understand) and then it is up to you to declare the rest wherever you are a tax resident and pay any extra taxes according to local laws etc.
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  #43  
Old 23.04.2014, 23:41
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Re: Low Cost Broker with no Regular/Custody Fees

15% withholding tax are for US equities but what if you get dividends from non-US companies ?
For example if you own a German dividend paying stock, I assume IB will apply the German-US tax treaty and not the German-Swiss one.
Germany will keep 26,375% withholding tax and possibly the US will also keep 15% on the dividend.
The question is how to avoid this double taxation and, as a Swiss resident, to get the German withholding tax back ?
I hope the situation is understandable. Thank you again for your comments.
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  #44  
Old 24.04.2014, 10:15
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Re: Low Cost Broker with no Regular/Custody Fees

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15% withholding tax are for US equities but what if you get dividends from non-US companies ?
For example if you own a German dividend paying stock, I assume IB will apply the German-US tax treaty and not the German-Swiss one.
Germany will keep 26,375% withholding tax and possibly the US will also keep 15% on the dividend.
The question is how to avoid this double taxation and, as a Swiss resident, to get the German withholding tax back ?
I hope the situation is understandable. Thank you again for your comments.
Depends on if they are held as ADR's, the with holding tax can be zero.
The US won't add any tax on non US equities.
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  #45  
Old 24.04.2014, 10:51
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Re: Low Cost Broker with no Regular/Custody Fees

Swiss banks (I work for Swiss online broker Strateo, www.strateo.ch) are required to withhold 15% tax on US dividends on top of the 15% that is withheld in the US if paid to Swiss residents. This is meant as an incentive to declare your account as you will then be taxed at your real tax rate, which means that most people get money back compared to the 30% they paid already. The US is the only country where we have this additional tax on dividend. For dividend from other countries, you only have the tax at source, the rate of which varies from country to country.
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  #46  
Old 24.04.2014, 11:09
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Re: Low Cost Broker with no Regular/Custody Fees

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Swiss banks (I work for Swiss online broker Strateo, www.strateo.ch) are required to withhold 15% tax on US dividends on top of the 15% that is withheld in the US if paid to Swiss residents. This is meant as an incentive to declare your account as you will then be taxed at your real tax rate, which means that most people get money back compared to the 30% they paid already. The US is the only country where we have this additional tax on dividend. For dividend from other countries, you only have the tax at source, the rate of which varies from country to country.
So to avoid the delayed cash flow, hold US equities in a US brokers account & just have 15% deducted.
You also charge Swiss Stamp duty on US Equities, there is no US Stamp duty so it's a double sammy to use a Swiss broker.
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  #47  
Old 24.04.2014, 11:31
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Re: Low Cost Broker with no Regular/Custody Fees

In terms of costs, you will be better off in the US. Guess this is the same for most if not all products and services in Switzerland. But I believe you need to value services and proximity as well. I regularly have security transfers from Swiss clients who had a US brokerage account but were unhappy with the service they got and the difficulty they had to transfer money in and out.
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  #48  
Old 24.04.2014, 12:00
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Re: Low Cost Broker with no Regular/Custody Fees

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In terms of costs, you will be better off in the US. Guess this is the same for most if not all products and services in Switzerland. But I believe you need to value services and proximity as well. I regularly have security transfers from Swiss clients who had a US brokerage account but were unhappy with the service they got and the difficulty they had to transfer money in and out.
They should use Charles Schwab, you get a USD credit card, US Cheque Book & wire transfers to Europe are FREE. Takes 2 days for the money to arrive. You cant get easier than that.
BTW there is ZERO charge for a cash withdrawal at an ATM, I tested it by withdrawing 10 CHF
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  #49  
Old 24.04.2014, 17:22
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Re: Low Cost Broker with no Regular/Custody Fees

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Depends on if they are held as ADR's, the with holding tax can be zero.
I don't know ADRs yet.

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For dividend from other countries, you only have the tax at source, the rate of which varies from country to country.
But tax at source is withheld by the country of origin and, in case of Germany, you have to request it back from the German Tax Authority, don't you.

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They should use Charles Schwab
Is it possible to open an account at Charles Schwab as a Swiss resident ?

Would it be possible to forum members to provide numerical examples of dividend taxation for US / non-US equities while using US / non-US brokers ? This would indeed be very helpful.
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  #50  
Old 25.04.2014, 00:32
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Re: Low Cost Broker with no Regular/Custody Fees

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Interactive Brokers or CornerTrade?

Pros, cons, experiences?
CornerTrade (a Swiss company) seems cheaper for trading US equities than Interactive Brokers (a US company). Strange to me or am I missing the point?


I'd pick the Swiss for stability, you?
Or how to do due diligence on a broker?
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  #51  
Old 25.04.2014, 23:58
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Re: Low Cost Broker with no Regular/Custody Fees

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CornerTrade (a Swiss company) seems cheaper for trading US equities than Interactive Brokers (a US company). Strange to me or am I missing the point?
Well, not really. Where did you get this information ?

For US stocks:
- IB: 0,005/share Min 1USD
- Corner Trader: 0,02/share Min 12USD (Trader Capital)

For Swiss stocks:
- IB: 0,1% Min 10CHF
- Corner Trader: 0,12% Min 18CHF (Trader Capital)

For UK stocks:
- IB: 6GBP up to 50000GBP trade value
- Corner Trader: 0,2% Min 15GBP (Trader Capital)

...

Additionally in Switzerland you have to pay a stamp duty of 0.075% on Swiss stocks and a hefty 0.15% on foreign stocks, which more than doubles your total trading costs !
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  #52  
Old 26.04.2014, 10:41
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Re: Low Cost Broker with no Regular/Custody Fees

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Well, not really. Where did you get this information ?

For US stocks:
- IB: 0,005/share Min 1USD
- Corner Trader: 0,02/share Min 12USD (Trader Capital)

For Swiss stocks:
- IB: 0,1% Min 10CHF
- Corner Trader: 0,12% Min 18CHF (Trader Capital)

For UK stocks:
- IB: 6GBP up to 50000GBP trade value
- Corner Trader: 0,2% Min 15GBP (Trader Capital)

...

Additionally in Switzerland you have to pay a stamp duty of 0.075% on Swiss stocks and a hefty 0.15% on foreign stocks, which more than doubles your total trading costs !
Of course that CH stamp duty is in addition to UK stamp duty, if you buy those UK companies as ADR's then no stamp duty & no withholding tax.
The biggest loss of holding US companies with a non US broker is you don't get to participate in class actions......I did not realize how often this happens so many $$$$$$$$ lost this way.

And yes a Swiss resident can open an account with Schwab, I would have not have mentioned it if it was not possible.
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  #53  
Old 26.04.2014, 23:32
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Re: Low Cost Broker with no Regular/Custody Fees

ADRs are not for free either.

As found on
http://seekingalpha.com/article/3140...ividend-stocks

The sponsoring bank for the ADR will charge an annual fee, about 5c per share. it will also charge a fee for currency conversion, up to about 2% of the dividend. This has been my experiences this year with NZT and other ADRs serviced by Mellon or JP Morgan.
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  #54  
Old 27.04.2014, 05:49
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Re: Low Cost Broker with no Regular/Custody Fees

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ADRs are not for free either.

As found on
http://seekingalpha.com/article/3140...ividend-stocks

The sponsoring bank for the ADR will charge an annual fee, about 5c per share. it will also charge a fee for currency conversion, up to about 2% of the dividend. This has been my experiences this year with NZT and other ADRs serviced by Mellon or JP Morgan.
Do you believe currency conversion on small amounts is ever free?
It will take many years for the 5c fee to exceed the stamp duty, especially where UK shares are concerned v where held by a Swiss broker.
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  #55  
Old 30.04.2014, 21:33
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Re: Low Cost Broker with no Regular/Custody Fees

I've made some enquiries on brokers and found that Saxo bank probably is the best broker to buy UK shares as a Swiss resident.

Their fees are expensive (0.001%) for trades above 20K but you avoid the CH stamp duty altogether as you'll have to already pay the 0.005% UK stamp duty. They also charge £25 per quarter for inactivity but you can circumvent that by buying and selling NOK borse with no dealing fees at the same time with a margin so low that it'll cost you a around 10 pence for the transaction.

You can fund the account with your debit card with a max limit of 100K and their customer service seems very good.

The great news is that being a CH resident you don't have to pay CGT.

I was originally planning to buy US shares but then decided against it as I'll create a currency exposure if I held USD shares and the GBP is getting stronger day by day, so best to keep investment in GBP for the time being. Furthermore, it's best to invest in companies you know and can understand the language of their Annual Reports analyst reports.
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  #56  
Old 07.08.2014, 10:30
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Re: Low Cost Broker with no Regular/Custody Fees

Hey,
I've been looking for some online broker, stocks, maybe commodities in future. Right now following brokers are in my choice: Saxobank, IB (both minimum 10 000, I would like to start with less money...), Swissquote and Corner Trader. I could find a lot of information here about first 3. But does anyone of you have experience with Corner Trader?
Thanks
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  #57  
Old 07.08.2014, 12:04
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Re: Low Cost Broker with no Regular/Custody Fees

Strateo has no minimum deposit requirement (www.strateo.ch) if you like to start with less than 10K. Corner Trader does not actually have its own platform, it's basically a white label of Saxobank. My friend used Corner Trader but stopped after having to wait each time a full week to get a response to his emails. .
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  #58  
Old 10.08.2014, 18:26
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Re: Low Cost Broker with no Regular/Custody Fees

Thank you for the information that Corner Trader is a white label of Saxobank because Saxobank writes on its CH-website
Dividends from stock positions
Dividend payments from stock positions will be credited to the clients account with any applicable standard withholding taxes deducted.
Saxo Bank cannot currently support or offer preferential withholding tax rates that may be available due to residency or legal status.“

As my goal is to do long-term investing and thus to get also some dividends, Corner Trader is therefore no longer an option for me.

So the two options remain:
- US broker (IB, Charles Schwab, ...)
- CH broker (Swissquote, Strateo, ...)

Belgo, is Strateo able to apply the preferential withholding tax rates on foreign dividends ?
If yes could you please provide us with an example of DE or UK dividend paid to a CH-resident.
Many thanks in advance.
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  #59  
Old 12.08.2014, 11:08
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Re: Low Cost Broker with no Regular/Custody Fees

For a UK dividend, 10% WT applies, for a DE dividend, it would be 26.375%.
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  #60  
Old 13.08.2014, 16:50
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Re: Low Cost Broker with no Regular/Custody Fees

Thanks! I tried out Strateo but I didn't like their web interface... Unfortunately Swissquote doesn't have demo account for Stock/Commodities trading. But I'll probably try them as I saw good experience here...
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