Go Back   English Forum Switzerland > Help & tips > Finance/banking/taxation  
Reply
 
Thread Tools Display Modes
  #1  
Old 15.03.2008, 16:16
Senior Member
 
Join Date: Jan 2008
Location: Basel
Posts: 326
Groaned at 40 Times in 21 Posts
Thanked 30 Times in 21 Posts
Gaggiol0 is considered unworthyGaggiol0 is considered unworthyGaggiol0 is considered unworthyGaggiol0 is considered unworthy
Trading and taxation in switzerland...

As an occasional trader, would I need to pay income taxes to Switzerland?
Is there any capital gain rate?

I have read that it applies on professional traders, well I am not really a professional, but a salary rounder .

Thanks.
Reply With Quote
  #2  
Old 15.03.2008, 18:51
Nathu's Avatar
Forum Legend
 
Join Date: Apr 2007
Location: Zürich
Posts: 4,674
Groaned at 18 Times in 16 Posts
Thanked 2,208 Times in 1,248 Posts
Nathu has a reputation beyond reputeNathu has a reputation beyond reputeNathu has a reputation beyond reputeNathu has a reputation beyond reputeNathu has a reputation beyond reputeNathu has a reputation beyond repute
Re: Trading and taxation in switzerland...

I think as a private/hobby trader you pay income tax on dividends, but not on potential and realised quotation winnings. Zero-bonds ere exempt from this. Well that's a first answer until the pros come back from the weekend.
Reply With Quote
  #3  
Old 15.03.2008, 19:48
Goldtop's Avatar
Forum Legend
 
Join Date: Feb 2008
Location: Zurich
Posts: 2,857
Groaned at 11 Times in 11 Posts
Thanked 905 Times in 625 Posts
Goldtop has a reputation beyond reputeGoldtop has a reputation beyond reputeGoldtop has a reputation beyond reputeGoldtop has a reputation beyond repute
Re: Trading and taxation in switzerland...

There are a published set of rules defining the professional trader. Among the parameters are:

  • High frequency of trading
  • Low holding duration
  • Substantial volumes traded
  • Using borrowed money or leverage
  • Professional knowhow, e.g. banker
  • Complexity of instruments
  • Capital gains disproportionate to income

It all depends on the assessing tax officer! They are said to be lenient in ZH. Unless you are on their radar.


Reply With Quote
  #4  
Old 16.03.2008, 11:20
Senior Member
 
Join Date: Jan 2008
Location: Basel
Posts: 326
Groaned at 40 Times in 21 Posts
Thanked 30 Times in 21 Posts
Gaggiol0 is considered unworthyGaggiol0 is considered unworthyGaggiol0 is considered unworthyGaggiol0 is considered unworthy
Re: Trading and taxation in switzerland...

Ok, should they define you a professional trafer, how much would you pay of your income?

Quote:
View Post
There are a published set of rules defining the professional trader. Among the parameters are:

  • High frequency of trading
  • Low holding duration
  • Substantial volumes traded
  • Using borrowed money or leverage
  • Professional knowhow, e.g. banker
  • Complexity of instruments
  • Capital gains disproportionate to income

It all depends on the assessing tax officer! They are said to be lenient in ZH. Unless you are on their radar.


Reply With Quote
  #5  
Old 16.03.2008, 16:35
Senior Member
 
Join Date: Jan 2008
Location: Basel
Posts: 326
Groaned at 40 Times in 21 Posts
Thanked 30 Times in 21 Posts
Gaggiol0 is considered unworthyGaggiol0 is considered unworthyGaggiol0 is considered unworthyGaggiol0 is considered unworthy
Re: Trading and taxation in switzerland...

Quote:
View Post
Ok, should they define you a professional trafer, how much would you pay of your income?
And also... even if I trade on forex do I need to declare my income in somewhat way?

Thanks.
Reply With Quote
  #6  
Old 16.03.2008, 16:42
Natasha's Avatar
Forum Legend
 
Join Date: Aug 2007
Location: St Anton am Arlberg, Austria
Posts: 2,737
Groaned at 61 Times in 57 Posts
Thanked 3,248 Times in 1,167 Posts
Natasha has a reputation beyond reputeNatasha has a reputation beyond reputeNatasha has a reputation beyond reputeNatasha has a reputation beyond reputeNatasha has a reputation beyond reputeNatasha has a reputation beyond repute
Re: Trading and taxation in switzerland...

Hi Goldtop, I don't mean to be rude, but I find that your colour and font distracts from the content of your posts
Reply With Quote
This user would like to thank Natasha for this useful post:
  #7  
Old 16.03.2008, 19:29
Goldtop's Avatar
Forum Legend
 
Join Date: Feb 2008
Location: Zurich
Posts: 2,857
Groaned at 11 Times in 11 Posts
Thanked 905 Times in 625 Posts
Goldtop has a reputation beyond reputeGoldtop has a reputation beyond reputeGoldtop has a reputation beyond reputeGoldtop has a reputation beyond repute
Re: Trading and taxation in switzerland...

Quote:
View Post
And also... even if I trade on forex do I need to declare my income in somewhat way?

Thanks.
If you are raking it in big time, then the taxman might want to join the party!

Irrelevant what you trade in. Any connection between your "other" profession, (e.g. you are a banker/broker) and your trading activities? Then it is one more common-sense reason to view the trading as professional.
Reply With Quote
  #8  
Old 16.03.2008, 19:18
Goldtop's Avatar
Forum Legend
 
Join Date: Feb 2008
Location: Zurich
Posts: 2,857
Groaned at 11 Times in 11 Posts
Thanked 905 Times in 625 Posts
Goldtop has a reputation beyond reputeGoldtop has a reputation beyond reputeGoldtop has a reputation beyond reputeGoldtop has a reputation beyond repute
Re: Trading and taxation in switzerland...

Quote:
View Post
Ok, should they define you a professional trafer, how much would you pay of your income?
Very unlikely that you are classified as professional trader. If you are, then the same rules apply as for any profession.

Net capital gain is capital gains minus any capital losses minus expenses.

Net gain is added to other income and taxed as income. Moreover, this trading income is also liable to social-security contributions.
Reply With Quote
  #9  
Old 17.03.2008, 15:58
Senior Member
 
Join Date: Jan 2008
Location: Basel
Posts: 326
Groaned at 40 Times in 21 Posts
Thanked 30 Times in 21 Posts
Gaggiol0 is considered unworthyGaggiol0 is considered unworthyGaggiol0 is considered unworthyGaggiol0 is considered unworthy
Re: Trading and taxation in switzerland...

Quote:
View Post
Ok, should they define you a professional trafer, how much would you pay of your income?
Thanks.... ?
Reply With Quote
  #10  
Old 23.07.2008, 19:29
Member
 
Join Date: May 2008
Location: Zug
Posts: 183
Groaned at 14 Times in 10 Posts
Thanked 87 Times in 52 Posts
mike_n has annoyed a few people around heremike_n has annoyed a few people around here
Re: Trading and taxation in switzerland...

Quote:
View Post
There are a published set of rules defining the professional trader. Among the parameters are:

  • High frequency of trading
  • Low holding duration
  • Substantial volumes traded
  • Using borrowed money or leverage
  • Professional knowhow, e.g. banker
  • Complexity of instruments
  • Capital gains disproportionate to income

It all depends on the assessing tax officer! They are said to be lenient in ZH. Unless you are on their radar.


Generally, if you know what you are doing and subsequently earn money, you are guilty and you'll have to pay. They call you professional. Or you'll have to adapt your trading strategy, so that you won't be classified as a professional trader, which in some cases is rather impossible.

The capital gains obtained by the residents of Switzerland are taxed even if the opposite is claimed. Only "small" capital gains are not taxed which is rather irrelevant.

Considering the diversity and progressive tax system, Switzerland is no low tax country by far. The taxes are in my opinion medium to high.
Reply With Quote
  #11  
Old 23.07.2008, 19:44
Goldtop's Avatar
Forum Legend
 
Join Date: Feb 2008
Location: Zurich
Posts: 2,857
Groaned at 11 Times in 11 Posts
Thanked 905 Times in 625 Posts
Goldtop has a reputation beyond reputeGoldtop has a reputation beyond reputeGoldtop has a reputation beyond reputeGoldtop has a reputation beyond repute
Re: Trading and taxation in switzerland...

Quote:
View Post
Generally, if you know what you are doing and subsequently earn money, you are guilty and you'll have to pay. They call you professional. Or you'll have to adapt your trading strategy, so that you won't be classified as a professional trader, which in some cases is rather impossible.

The capital gains obtained by the residents of Switzerland are taxed even if the opposite is claimed. Only "small" capital gains are not taxed which is rather irrelevant.

Considering the diversity and progressive tax system, Switzerland is no low tax country by far. The taxes are in my opinion medium to high.
Taxation in Switzerland is progressive. Low taxes for low incomes, medium taxes for medium incomes and high taxes for high incomes. Moreover, "professional traders" would have to pay social-security contributions of about 10%.

Capital-gains are tax free for investors. Example, you now buy a stack of cheap UBS shares and sell them after a year: that is tax free.

Anyone trading may have the misfortune of being branded as "professional". However, the rumor is that very few, at least in ZH, are thus classified.
Reply With Quote
  #12  
Old 23.07.2008, 20:37
ch0404's Avatar
Junior Member
 
Join Date: Jul 2008
Location: Zürich
Posts: 32
Groaned at 0 Times in 0 Posts
Thanked 4 Times in 2 Posts
ch0404 has no particular reputation at present
Re: Trading and taxation in switzerland...

Hi Goldtop, Is that a stated rule then that if you hold shares for over one year then they will not be classed as a trading activity?

Also do you know if capital gains realised in a UK tax shelter (ISA - Individual Savings Account) would have to be recorded on the tax return?
Reply With Quote
  #13  
Old 21.07.2008, 23:04
ch0404's Avatar
Junior Member
 
Join Date: Jul 2008
Location: Zürich
Posts: 32
Groaned at 0 Times in 0 Posts
Thanked 4 Times in 2 Posts
ch0404 has no particular reputation at present
Re: Trading and taxation in switzerland...

Hi Goldtop,

Please can you quote the source you used for the definition of a Professional Trader.

Thanks in advance
Reply With Quote
  #14  
Old 22.07.2008, 06:57
gbn's Avatar
gbn gbn is offline
Forum Legend
 
Join Date: Dec 2005
Location: Zuri Oberland
Posts: 2,718
Groaned at 109 Times in 74 Posts
Thanked 2,333 Times in 1,097 Posts
gbn has a reputation beyond reputegbn has a reputation beyond reputegbn has a reputation beyond reputegbn has a reputation beyond reputegbn has a reputation beyond repute
Re: Trading and taxation in switzerland...

You have to be licensed as well to be a professional I think
I work near traders at Large Bank and picked this up a few weeks ago.

If you're just punting a bit of money on UBS, I'm sure they won't be interested...
Reply With Quote
  #15  
Old 22.07.2008, 12:01
Goldtop's Avatar
Forum Legend
 
Join Date: Feb 2008
Location: Zurich
Posts: 2,857
Groaned at 11 Times in 11 Posts
Thanked 905 Times in 625 Posts
Goldtop has a reputation beyond reputeGoldtop has a reputation beyond reputeGoldtop has a reputation beyond reputeGoldtop has a reputation beyond repute
Re: Trading and taxation in switzerland...

Quote:
View Post
You have to be licensed as well to be a professional I think
I work near traders at Large Bank and picked this up a few weeks ago.

If you're just punting a bit of money on UBS, I'm sure they won't be interested...
This thread pertains to the income tax implications of trading and how the taxman views trading profits.

No license needed if you are only trading your own money. Registration for finance regulatory aspects, or to obtain preferential conditions at an exchange, is another topic.
Reply With Quote
  #16  
Old 22.07.2008, 13:50
ch0404's Avatar
Junior Member
 
Join Date: Jul 2008
Location: Zürich
Posts: 32
Groaned at 0 Times in 0 Posts
Thanked 4 Times in 2 Posts
ch0404 has no particular reputation at present
Re: Trading and taxation in switzerland...

Thanks for the help goldtop.
Reply With Quote
  #17  
Old 22.07.2008, 11:52
Goldtop's Avatar
Forum Legend
 
Join Date: Feb 2008
Location: Zurich
Posts: 2,857
Groaned at 11 Times in 11 Posts
Thanked 905 Times in 625 Posts
Goldtop has a reputation beyond reputeGoldtop has a reputation beyond reputeGoldtop has a reputation beyond reputeGoldtop has a reputation beyond repute
Re: Trading and taxation in switzerland...

Quote:
View Post
Hi Goldtop,

Please can you quote the source you used for the definition of a Professional Trader.

Thanks in advance
This is a complex topic!

The Federal Guideline is in this document (sorry, Swiss Government document, only in Swiss official languages, here the German version):
http://www.estv.admin.ch/d/dvs/kreis...-DV-2008-d.pdf

Each canton has its own implementation style. And each tax assessing officer uses his/her discretion. So, you only discover after filing, whether the tax department considers you to be a "professional trader" for tax purposes.

You may be so classified, and trading profits added to taxable income, when you:
  • Obtain significant trading profits comparable to other income.
  • Have professional trading skills (e.g. finance qualifications, work for a Bank, etc.).
  • Leveraged, i.e. borrowed money, including house mortgage.
  • Large number of trades.
  • Short holding periods.
  • etc.
Suggest you talk to your broker/bank and/or consult a tax specialist. You can also get a binding advance decision from the tax department, but would of course need to reveal many details and thus attract attention.
__________________
Caveat lector!
Reply With Quote
Reply




Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Online Trading Nickj Finance/banking/taxation 26 23.02.2016 11:39
FX trading in Switzerland devinder2801 Finance/banking/taxation 4 12.09.2007 08:50
Trading Standards Equivalent? nickatbasel Other/general 1 12.01.2007 08:30


All times are GMT +2. The time now is 07:08.


Powered by vBulletin® Version 3.8.4
Copyright ©2000 - 2019, Jelsoft Enterprises Ltd.
LinkBacks Enabled by vBSEO 3.1.0