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Old 08.12.2007, 19:37
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Some Tax Questions

I have some questions regarding Swiss tax.
I have a B permit (Non-EU Canadian) with gross salary under 120K.
I have US brokerage account in which I am registered as a foreign account holder and therefore am not liable for capital gains tax, but do pay withholding tax on dividends ( I was previously living in countries without capitals gain tax).
I have an offshore bank account in the Channel Islands with both EUR and CAD funds.

1. I am assuming that Swiss income tax will be deducted at source in my case.
2. I have read that in Switzerland there is no capital gains tax from stocks, but there is for dividends. Will I have to file a return for the dividends, even though tax is being withheld at source?
3. Is there Swiss tax on interest paid to my offshore bank accounts?
Thanks.
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Old 08.12.2007, 21:22
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Re: Some Tax Questions

Can only help with 1) yes, tax will be deducted at source from your salary, if you are talking about CHF 120k.
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Old 09.12.2007, 11:21
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Re: Some Tax Questions

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2. I have read that in Switzerland there is no capital gains tax from stocks, but there is for dividends. Will I have to file a return for the dividends, even though tax is being withheld at source?


Legally, yes.

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3. Is there Swiss tax on interest paid to my offshore bank accounts?
Thanks.
Since they're offshore, no tax will be charged by the bank; however you''ll have to declare the interest and pay tax accordingly.
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Old 10.12.2007, 22:22
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Re: Some Tax Questions

Thanks for the help.
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Old 10.12.2007, 23:14
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Re: Some Tax Questions

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1. I am assuming that Swiss income tax will be deducted at source in my case.
2. I have read that in Switzerland there is no capital gains tax from stocks, but there is for dividends. Will I have to file a return for the dividends, even though tax is being withheld at source?
3. Is there Swiss tax on interest paid to my offshore bank accounts?
Thanks.
Just to make this clear...

2. If you are living and working in Switzerland and not a US citizen then you should complete a W8BEN form with the US brokerage. This exempts you from the US withholding tax. You will then be taxed at Swiss rates for dividends, which I might add is rather favourable...

3. The channel isles don't talk to the Swiss authorities so if you don't tell the Swiss you have the money there and don't bring it into Switzerland to make a major purchase then they will be none the wiser.
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Old 11.12.2007, 01:41
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Re: Some Tax Questions

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Just to make this clear...

2. If you are living and working in Switzerland and not a US citizen then you should complete a W8BEN form with the US brokerage. This exempts you from the US withholding tax. You will then be taxed at Swiss rates for dividends, which I might add is rather favourable...

3. The channel isles don't talk to the Swiss authorities so if you don't tell the Swiss you have the money there and don't bring it into Switzerland to make a major purchase then they will be none the wiser.
2. Rigth. With WBEN the brokerage does not withold for capital gains, but they do withold for dividends.

3. I forsee having to transfer several thousand, say 10k, once I set up a Swiss account for starting up once I arrive. Would that put me on their radar?
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Old 11.12.2007, 08:41
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Re: Some Tax Questions

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2. Rigth. With WBEN the brokerage does not withold for capital gains, but they do withold for dividends.

3. I forsee having to transfer several thousand, say 10k, once I set up a Swiss account for starting up once I arrive. Would that put me on their radar?
2. Not true, you are also free from dividends and interest if your residence is Switzerland. Note the W8BEN tax rules are dependent on your residence and the associated tax treaty with the USA. If you put down residence isSwitzerland, and also provide identity information then the US Brokerage must free you from all tax - assuming you claim 0% Tax on the form!

3. No definitely not - you are opening an account and transfering your balance...
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Old 11.12.2007, 10:06
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Re: Some Tax Questions

Richard, I'm not 100% up to date on this but, didn't the Channel Isles commit to sharing information under the EU savings directive? If this is the case, the EU - Swiss Savings/Interest agreement would lead to information sharing between CH and C Isles?


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2. Not true, you are also free from dividends and interest if your residence is Switzerland. Note the W8BEN tax rules are dependent on your residence and the associated tax treaty with the USA. If you put down residence isSwitzerland, and also provide identity information then the US Brokerage must free you from all tax - assuming you claim 0% Tax on the form!

3. No definitely not - you are opening an account and transfering your balance...
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Old 11.12.2007, 15:08
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Re: Some Tax Questions

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Richard, I'm not 100% up to date on this but, didn't the Channel Isles commit to sharing information under the EU savings directive? If this is the case, the EU - Swiss Savings/Interest agreement would lead to information sharing between CH and C Isles?
I believe my RBC Channel Island bank is part of the directive for EUR held funds, and they withold tax on interes for those living in the EU. I am not sure if this applies to residency in Switzerland though. I will have to check.
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Old 13.12.2007, 18:26
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Re: Some Tax Questions

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Richard, I'm not 100% up to date on this but, didn't the Channel Isles commit to sharing information under the EU savings directive? If this is the case, the EU - Swiss Savings/Interest agreement would lead to information sharing between CH and C Isles?
Here is a link to the European Savings Tax Directive for jersey.

http://www.jerseyfinance.je/content/1284/index.aspx
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