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Old 10.05.2016, 15:54
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ETF Taxes?

Hello

I am 23 years old and plan to invest into an ETF. I would invest 15k now and then every month minimum 1k. I plan to hold that fond for 15-20 years.

The fonds cost every year are .25% and it's domicil is Ireland. Do I have to pay taxes on the dividends? If so which ones and how much? Also which is the best broker (prices) to do that because I have to re-invest the dividends by myself since it's an ETF. So I can not offord huge order costs everytime.


thank you for the help.
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Old 10.05.2016, 22:18
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Re: ETF Taxes?

In Switzerland we are taxed on our world wide income and assets. Legally you have to pay taxes on all of it, but I have heard that many people forget to write it on the tax form. The tax on assets is very low, so why not buy an EFT with accumulated dividends, and then you have no income?

You might have a problem in the future if you decide to use the asset in Switzerland. Tax inspectors have been known to ask (for instance) where you got the house deposit from. So you might find it easier for the future to remember to declare the asset on the tax form.
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Old 11.05.2016, 10:35
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Re: ETF Taxes?

OP you may want/need to reconsider.

First, it's probably not that good of an idea to put all eggs in the same basket. It's probably a good idea to buy a big portion of your assets in stocks, but some diversification seems recommended.

Second, the irish ETF holds swiss stock, receives dividends on them. Payment is likely to happen using swiss bank accounts, in which case 35% withholding tax are subtracted. The irish ETF may or may not be able to reclaim the full amount (subject to applicable double-taxation treaties); if it doesn't then its dividend income will be reduced accordingly, as well as the performance of your position.

So you want to inform yourself which applies.

As for automatic re-buys:
It may also be useful to ask the ETF company, they may have special arrangements with some bank, but that may raise issues with cash tranafers abroad (plenty of info on this forum available for the latter). Otherwise, with 1k monthly you may want to check out some low-cost broker like Swissquote or Postfinance.
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Old 11.05.2016, 22:19
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Re: ETF Taxes?

Thanks to both of you. Here is the part that I dont understand.

So let's say I buy an ETF that bilds the SPI/SMI. Then I will get dividends payed (quarterly) but from these ones 35% eill get taken off because of Taxes - which I will get back though later when I fill off my Steuereklärung.

So now I buy an ETF based on Ireland and get my dividend paid. I dont have to give away the 35% and will get paid 100%. If the fond holds Swiss stocks ( lets just say here 50%) then 35% of these 50% will be taken away which I can't reclaim. Are there other taxes I forgot off?

Is that correct?
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Old 11.05.2016, 23:11
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Re: ETF Taxes?

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OP you may want/need to reconsider.
First, it's probably not that good of an idea to put all eggs in the same basket. It's probably a good idea to buy a big portion of your assets in stocks, but some diversification seems recommended.

Actually, since you are 23 - I would rather say you should be 100% equity until say 30, perhaps even 40, then switch 30% every 10 years into more conservative positions.
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Old 11.05.2016, 23:15
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Re: ETF Taxes?

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Actually, since you are 23 - I would rather say you should be 100% equity until say 30, perhaps even 40, then switch 30% every 10 years into more conservative positions.
You mean stocks here right?
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Old 12.05.2016, 00:07
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Re: ETF Taxes?

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Actually, since you are 23 - I would rather say you should be 100% equity until say 30, perhaps even 40, then switch 30% every 10 years into more conservative positions.
I am 54 retired & am 90% invested in stocks & will remain so for the next 30 years. Had I followed your logic I would have had to work forever & never be able to retire. Even if the market crashes 50% it will recover just look at 2008, not being fully invested in stocks will cost you far more in the long run.
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Old 12.05.2016, 09:03
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Re: ETF Taxes?

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I am 54 retired & am 90% invested in stocks & will remain so for the next 30 years. Had I followed your logic I would have had to work forever & never be able to retire. Even if the market crashes 50% it will recover just look at 2008, not being fully invested in stocks will cost you far more in the long run.
I think ETF's are a much safer choice because Stocks can go to value 0% while with ETF underperforming stocks will get replaced with better ones. In my eyes that means that the risk is lower than investing in stocks directly. And if you'd be invested in an ETF for 30-40 years. You can retire too.
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Old 12.05.2016, 09:12
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Re: ETF Taxes?

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I think ETF's are a much safer choice because Stocks can go to value 0% while with ETF underperforming stocks will get replaced with better ones. In my eyes that means that the risk is lower than investing in stocks directly. And if you'd be invested in an ETF for 30-40 years. You can retire too.
EFT actually carries greater risks & could also go to zero. EFT's have not been around for 30 years so it would not have been possible to have been invested so long. Why a long term investor needs a new price every fraction of a second v daily beats me.
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Old 12.05.2016, 09:16
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Re: ETF Taxes?

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I am 54 retired & am 90% invested in stocks & will remain so for the next 30 years. Had I followed your logic I would have had to work forever & never be able to retire. Even if the market crashes 50% it will recover just look at 2008, not being fully invested in stocks will cost you far more in the long run.
My point was mainly to be more skewed to equities then previously suggested.

In the long run? ..let's see in 10 years...past performance is no guarantee of future results.
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Old 12.05.2016, 09:19
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Re: ETF Taxes?

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My point was mainly to be more skewed to equities then previously suggested.

In the long run? ..let's see in 10 years...past performance is no guarantee of future results.
That's not what you said, you advocated going to 30% cash aged 30

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Actually, since you are 23 - I would rather say you should be 100% equity until say 30, perhaps even 40, then switch 30% every 10 years into more conservative positions.
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Old 12.05.2016, 11:56
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Re: ETF Taxes?

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I am 23 years old and plan to invest into an ETF. I would invest 15k now and then every month minimum 1k. I plan to hold that fond for 15-20 years.
I would recommend to take a look at TrueWealth: https://www.truewealth.ch/en
It is a Spin-off from ETH and is also based in Switzerland, so no big deal with cross-country taxes.

Their overall fee is around 0.7%, (Wealth management fee is only 0.5%). And the assets are invest in high liquid ETFs. Minimum deposit is only 8.5k.

The problem with investing in individual stock is that you will need quite a "large" amount to reach some diversification.
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Old 15.05.2016, 09:57
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Re: ETF Taxes?

Thanks, I will check this out
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