Hi There,

I searched this forum, before posting this question and couldn't find an answer to this question - I hold some shares of companies based in France and Germany (traded in Euronext and Xetra). Would my dividend earnings be automatically subjected to 35% withholding tax deduction? I used swissquote.ch to buy these shares. Would appreciate some help on this. Thanks. Ashish.

No, it's the withholding tax of the foreign country which will be levied. You can claim back a part and get a tax credit for the rest by filing appropriate forms in your tax return.

Swissquote told me that about 26% will be deducted automatically on dividends earned from a German company and paid to the German govt. They weren't sure as to whether I can claim it back. The situation isn't same as for swiss dividend earnings as far as I understood.

Any further feedback on this subject, is appreciated. Thanks

Ashish

Look for the EU Savings Tax Agreement between Switzerland and the EU on the Swiss Tax Authorities Webpage. You should find a fairly good English Translation of the Agreement on there. Am on iPhone so you'll have to search youself.

The 25% is the standard rate they have to levy if you don't want to waive bank secrecy. As of 2011 it will be 35%.

Thanks. I took a look at this web page - http://en.wikipedia.org/wiki/Europea...ithholding_tax

and it clearly excludes dividends from shares.



"The EU withholding tax is not levied on any other forms of income such as employment income, trading profits, commercial activities, royalties, annuities and similar income. Also, the EU withholding tax does not apply to dividends from shares, nor to capital gains and other profits realised on investments. All these types of income and profits are described as being "out of scope"."

The English translation seems to have disappeared, strange... I don't remember whether the terms for the EU Savings Directive and those of the EU-CH Agreement on the EU Savings Directive are identical but it strikes me as odd that Swissquote would say "we don't know" when, really, they should. Insist on getting a clear explanation, after all, if their system is wrongly allocating things as subject to WHT, then they have a problem. Please note - I am not saying they are wrongly withholding, as I am not a tax expert, I just translate that sort of thing.

The rule you cite pertains to EU residents having Swiss bank accounts. The Swiss bank must withhold taxes on certain income and remit it to the investor's EU country of residence.

You are a Swiss resident? Then you pay taxes in Switzerland on your global assets and revenues. You can reclaim the withheld taxes when you file a Swiss tax return.

Whether swissquote withholds tax or not is irrelevant. Swiss residents must declare all revenues (including dividends) received. The Swiss tax officer then calculates the tax due. Any withheld taxes are offset in the Swiss tax demand.

Thanks for responding to my request. In my understanding, you got my question wrong or it was my mistake of not wording it correctly. I'm a swiss resident and the question was about dividends earned from a company based in Germany. I perfectly know that I have to declare earnings on my swiss tax returns.

I quote my original text - "Swissquote told me that about 26% will be deducted automatically on dividends earned from a German company and paid to the German govt. They weren't sure as to whether I can claim it back.

To update my own post.

I got my dividends without any deduction. May be this info. is useful to someone in a similar situation.

Ashish

Good to see you received you dividends without withholding.

Just a word of caution. As has been mentioned on many threads do not solely rely on advice on the internet/EF (yes, I know it sounds pedantic).
This thread is an example of that:

1) we are talking about dividends, not interest so the EU Savings directive does not apply
2) and because of that the EU withholding tax reference is irrelevant.

If you hold these shares as a private investment, technically, both Germany and France do have the right to withhold 15% withholding tax on your dividends based on the respective double tax treaties for which you would be able to claim a credit in your Swiss tax return. That the wht was not withheld can have various reasons, but they are not based on the reasons given in this thread.

I make my own decisions based on my own efforts and information that I gather from forums like EF and others. Nevertheless, I like to listen to different views with an open mind as that often helps ... so, I still solicit feedback on this thread.

Ashish

ZH residents, who had dividends taxed abroad, can find the pertinent authoritative information here:
http://www.steueramt.zh.ch/html/formulare/index.htm

Look under section Steueranrechnung. Download form DA2, the guide Wegleitung and the examples Musterbeispiele.

Hi,

I was following the post for answers as I am in a similar situation. I have shares on UBS and PostFinance account. They take 35% withholding tax on all dividends. How did you get back your dividend without the withholding tax ? (to Ashish). Help will be much appreciated.

Regards,
-Ip

You may find the answer in Art. 10 of the Switzerland-Germany Tax Treaty:
http://www.admin.ch/ch/d/sr/0_672_913_62/a10.html (German version)
http://www.admin.ch/ch/f/rs/0_672_913_62/a10.html (French version)

Hi,
I am Swedish so my experience of this may not apply for other countries but may still be of interest. As I understand it it is all regulated in the tax treaty between the countries.

Before moving to CH I paid 35% witholding tax on Swiss dividends. By filling out a very thick swiss form, having it stamped in 3 copies IN SWEDEN and returning 2 copies to CH I eventually got back 20%. Meanwhile the swedish dividend tax is 30% and must be paid, however you can claim deductions for tax paid in CH, e.g. the tax which you can not get back = 15%. Thus you end up paying 15% to CH and 15% to S.

Now that I live in CH the Swedish "Coupon tax" on stock dividends is supposed to be 15% but they still take 30% as if I had not moved. I have now found out that a similar procedure applies but completely reversed. That is I take a Swedish fat form and have it stamped in CH and reclaim 15% from Sweden. When I do my swiss tax I should deduct the already paid tax in Sweden from my tax in CH.

Since I am in the process of doing my first tax return right now I cannot tell you if this really works. The first part - reclaiming Swiss tax before moving here - worked fine, although it took them a good 10 months to mull it over.

Next years tax I will be in a position to tell you more :-)

Sorry, read your mail adressed to me today!
You can claim back the withholding tax by filing tax returns.

Hope this helps

Ashish

Hi There

Would like to know if Swissquote deducts a percentage as tax on "French Share dividends" (traded in EuroNext). May be some EF members use Swissquote for trading like me. I called Swissquote, but the agent who answered me wasn't sure about this and last time, they didn't give me a correct answer either (see my earlier posts).

At the moment, my French banks deduct 33% as tax on dividends and to get back this amount, I have to go through a long procedure plus a wait for 1 year. With the german stocks that I traded in Swissquote, I got my dividends without any tax deduced.

Would appreciate a response. Thanks

Ashish