Go Back   English Forum Switzerland > Help & tips > Finance/banking/taxation  
Reply
 
Thread Tools Display Modes
  #1  
Old 04.02.2017, 23:20
Member
 
Join Date: Dec 2016
Location: Zurich
Posts: 107
Groaned at 0 Times in 0 Posts
Thanked 14 Times in 9 Posts
justcamehere has no particular reputation at present
Dividend taxation

Hello,

I'm trying to figure how dividend taxes work in Switzerland.

For Swiss dividends it seems straightforward. Company pays e.g. 1 CHF in divi, 0.35 CHF is withheld at source, a DA-1 form is sent, they rebate the withheld tax of 0.35 CHF, the 1 CHF is taxed as income at the income tax rate by filing the yearly Self-Assessment.

For foreign e.g. US dividends, how does it work? e.g. suppose I fill a W8BEN form and the US withholding tax on dividends drops to 15% (from 30%). For convenience lets assume again that the US company pays the USD equivalent of 1 CHF. The US company send 0.85 CHF to the broker in Switzerland.

- Does a Swiss broker withhold anything on top (e.g. another 20% to bring it in line with the 35% withholding rate) ?
- Can the 15% of US withholding tax be reclaimed from Switzerland with a DA-1 form?
Reply With Quote
  #2  
Old 04.02.2017, 23:40
fatmanfilms's Avatar
Forum Legend
 
Join Date: Apr 2010
Location: Verbier
Posts: 21,378
Groaned at 461 Times in 352 Posts
Thanked 23,091 Times in 11,824 Posts
fatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond repute
Re: Dividend taxation

Quote:
View Post
Hello,

I'm trying to figure how dividend taxes work in Switzerland.

For Swiss dividends it seems straightforward. Company pays e.g. 1 CHF in divi, 0.35 CHF is withheld at source, a DA-1 form is sent, they rebate the withheld tax of 0.35 CHF, the 1 CHF is taxed as income at the income tax rate by filing the yearly Self-Assessment.

For foreign e.g. US dividends, how does it work? e.g. suppose I fill a W8BEN form and the US withholding tax on dividends drops to 15% (from 30%). For convenience lets assume again that the US company pays the USD equivalent of 1 CHF. The US company send 0.85 CHF to the broker in Switzerland.

- Does a Swiss broker withhold anything on top (e.g. another 20% to bring it in line with the 35% withholding rate) ?
- Can the 15% of US withholding tax be reclaimed from Switzerland with a DA-1 form?
A Swiss broker will withhold 30% on US stocks, hold them with a US Broker.

The withholding tax can be reclaimed in full if your salary is high, if its 50k, you won't get it all back.
Reply With Quote
This user would like to thank fatmanfilms for this useful post:
  #3  
Old 04.02.2017, 23:46
Member
 
Join Date: Dec 2016
Location: Zurich
Posts: 107
Groaned at 0 Times in 0 Posts
Thanked 14 Times in 9 Posts
justcamehere has no particular reputation at present
Re: Dividend taxation

Quote:
View Post
A Swiss broker will withhold 30% on US stocks, hold them with a US Broker.

The withholding tax can be reclaimed in full if your salary is high, if its 50k, you won't get it all back.
Thanks for your response. If it can be reclaimed in full and rebate time is not too long, I'm fine holding them with a Swiss broker.

so it's 15% US withholding plus a 15% that Swiss brokers apply?

What about UK & Irish shares, is it again 10% (held at source) + 15% ?
Reply With Quote
  #4  
Old 04.02.2017, 23:58
fatmanfilms's Avatar
Forum Legend
 
Join Date: Apr 2010
Location: Verbier
Posts: 21,378
Groaned at 461 Times in 352 Posts
Thanked 23,091 Times in 11,824 Posts
fatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond repute
Re: Dividend taxation

Quote:
View Post
Thanks for your response. If it can be reclaimed in full and rebate time is not too long, I'm fine holding them with a Swiss broker.

so it's 15% US withholding plus a 15% that Swiss brokers apply?

What about UK & Irish shares, is it again 10% (held at source) + 15% ?
About 6 weeks after tax return submitted for refund in ZH

US is 15% + 15% with Swiss broker.

UK currently 0% as there is no tax credit any more. (Held with UK broker)

Irish no idea.
Reply With Quote
This user would like to thank fatmanfilms for this useful post:
  #5  
Old 05.02.2017, 00:04
Member
 
Join Date: Dec 2016
Location: Zurich
Posts: 107
Groaned at 0 Times in 0 Posts
Thanked 14 Times in 9 Posts
justcamehere has no particular reputation at present
Re: Dividend taxation

Quote:
View Post
About 6 weeks after tax return submitted for refund in ZH

US is 15% + 15% with Swiss broker.

UK currently 0% as there is no tax credit any more. (Held with UK broker)

Irish no idea.
Thanks for this, as it is rebated after submission of tax form, then why is the DA-1 form needed?
Reply With Quote
  #6  
Old 05.02.2017, 11:12
fatmanfilms's Avatar
Forum Legend
 
Join Date: Apr 2010
Location: Verbier
Posts: 21,378
Groaned at 461 Times in 352 Posts
Thanked 23,091 Times in 11,824 Posts
fatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond repute
Re: Dividend taxation

Quote:
View Post
Thanks for this, as it is rebated after submission of tax form, then why is the DA-1 form needed?
DA-1 is foreign dividends section of tax return.
Reply With Quote
This user would like to thank fatmanfilms for this useful post:
  #7  
Old 05.02.2017, 14:58
Meadow's Avatar
Senior Member
 
Join Date: Jul 2016
Location: Zurich
Posts: 272
Groaned at 6 Times in 5 Posts
Thanked 95 Times in 63 Posts
Meadow has no particular reputation at present
Re: Dividend taxation

I have VUSA and VEUR in Ireland. on VUSA there was no withholding tax. For VEUR they charged 20%. I have no idea how this works. My only guess is that since VEUR keeps shares from many countries, they just picked the country with the highest rate. There was nobody on this forum who could clarify this for me.
Reply With Quote
This user would like to thank Meadow for this useful post:
  #8  
Old 05.02.2017, 15:52
Member
 
Join Date: Dec 2016
Location: Zurich
Posts: 107
Groaned at 0 Times in 0 Posts
Thanked 14 Times in 9 Posts
justcamehere has no particular reputation at present
Re: Dividend taxation

Quote:
View Post
DA-1 is foreign dividends section of tax return.
Thanks for this and if assets are held with a US broker, even though the person is taxed at his residence, does (s)he need to also file US tax returns because he has assets held in the US?
Reply With Quote
  #9  
Old 05.02.2017, 16:12
fatmanfilms's Avatar
Forum Legend
 
Join Date: Apr 2010
Location: Verbier
Posts: 21,378
Groaned at 461 Times in 352 Posts
Thanked 23,091 Times in 11,824 Posts
fatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond repute
Re: Dividend taxation

Quote:
View Post
Thanks for this and if assets are held with a US broker, even though the person is taxed at his residence, does (s)he need to also file US tax returns because he has assets held in the US?
A non US citizen just files a W8BEN every 3 years with his broker. You won't be able to trade without one. No US tax return required.
Reply With Quote
  #10  
Old 05.02.2017, 16:19
Member
 
Join Date: Dec 2016
Location: Zurich
Posts: 107
Groaned at 0 Times in 0 Posts
Thanked 14 Times in 9 Posts
justcamehere has no particular reputation at present
Re: Dividend taxation

Quote:
View Post
A non US citizen just files a W8BEN every 3 years with his broker. You won't be able to trade without one. No US tax return required.
So it works exactly like with a UK broker with a W8BEN form, there's no need to also file a US tax return because the assets would be bought via a US broker.
Reply With Quote
  #11  
Old 05.02.2017, 16:25
fatmanfilms's Avatar
Forum Legend
 
Join Date: Apr 2010
Location: Verbier
Posts: 21,378
Groaned at 461 Times in 352 Posts
Thanked 23,091 Times in 11,824 Posts
fatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond repute
Re: Dividend taxation

Quote:
View Post
So it works exactly like with a UK broker with a W8BEN form, there's no need to also file a US tax return because the assets would be bought via a US broker.
Correct, just far lower trading costs. If you buy UK stocks as ADR's then no stamp duty either.
Reply With Quote
  #12  
Old 18.02.2017, 20:58
Newbie
 
Join Date: Nov 2016
Location: Valais
Posts: 6
Groaned at 0 Times in 0 Posts
Thanked 1 Time in 1 Post
wapiti has no particular reputation at present
Re: Dividend taxation

Could you confirm the following ?

-U.S stock with a U.S broker
You need to fill W8-ben, so dividends are only taxed at 15%.
The last 15% will be deducted from your taxes with DA-1

-U.S stock with a Swiss broker
15% of dividends will be reimbursed with the " U.S Additional tax deduction".
The last 15% will be deducted from your taxes with DA-1


"The withholding tax can be reclaimed in full if your salary is high"
Do you mean the DA-1 part ?
What are the precise rules ?
Reply With Quote
  #13  
Old 18.02.2017, 21:04
fatmanfilms's Avatar
Forum Legend
 
Join Date: Apr 2010
Location: Verbier
Posts: 21,378
Groaned at 461 Times in 352 Posts
Thanked 23,091 Times in 11,824 Posts
fatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond repute
Re: Dividend taxation

Quote:
View Post
Could you confirm the following ?

-U.S stock with a U.S broker
You need to fill W8-ben, so dividends are only taxed at 15%.
The last 15% will be deducted from your taxes with DA-1

-U.S stock with a Swiss broker
15% of dividends will be reimbursed with the " U.S Additional tax deduction".
The last 15% will be deducted from your taxes with DA-1


"The withholding tax can be reclaimed in full if your salary is high"
Do you mean the DA-1 part ?
What are the precise rules ?
YES
YES
I suspect that will depend on canton with 50k earnings you would get about 2/3 back in ZH.
Reply With Quote
  #14  
Old 19.02.2017, 00:02
Member
 
Join Date: Dec 2016
Location: Zurich
Posts: 107
Groaned at 0 Times in 0 Posts
Thanked 14 Times in 9 Posts
justcamehere has no particular reputation at present
Re: Dividend taxation

Quote:
View Post
YES
YES
I suspect that will depend on canton with 50k earnings you would get about 2/3 back in ZH.
What is the "U.S Additional tax deduction" ?
Reply With Quote
  #15  
Old 19.02.2017, 00:21
fatmanfilms's Avatar
Forum Legend
 
Join Date: Apr 2010
Location: Verbier
Posts: 21,378
Groaned at 461 Times in 352 Posts
Thanked 23,091 Times in 11,824 Posts
fatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond repute
Re: Dividend taxation

Quote:
View Post
What is the "U.S Additional tax deduction" ?
No idea what your talking about, are you a US citizen?
Reply With Quote
  #16  
Old 19.02.2017, 08:57
Newbie
 
Join Date: Nov 2016
Location: Valais
Posts: 6
Groaned at 0 Times in 0 Posts
Thanked 1 Time in 1 Post
wapiti has no particular reputation at present
Re: Dividend taxation

If the U.S stocks are with a swiss broker, there is an additional 15% on dividends. You need to fill the following form (R US 164) to get reimbursed


http://www4.ti.ch/fileadmin/DFE/DC/D...5_R-US-164.pdf
Reply With Quote
This user would like to thank wapiti for this useful post:
  #17  
Old 19.02.2017, 21:17
Member
 
Join Date: Dec 2016
Location: Zurich
Posts: 107
Groaned at 0 Times in 0 Posts
Thanked 14 Times in 9 Posts
justcamehere has no particular reputation at present
Re: Dividend taxation

Quote:
View Post
No idea what your talking about, are you a US citizen?
I'm not a US citizen, I saw the term "U.S Additional tax deduction" at wapiti's post and was curious to what it refers to.
Reply With Quote
  #18  
Old 27.09.2017, 22:50
martin959's Avatar
Forum Veteran
 
Join Date: Oct 2009
Location: St Gallen
Posts: 1,272
Groaned at 27 Times in 18 Posts
Thanked 577 Times in 329 Posts
martin959 has earned the respect of manymartin959 has earned the respect of manymartin959 has earned the respect of many
Re: Dividend taxation

How is this with I.B. that is a Uk broker, for US dividends in Switzerland?
Reply With Quote
  #19  
Old 27.09.2017, 23:58
Forum Veteran
 
Join Date: Feb 2012
Location: CH
Posts: 2,304
Groaned at 87 Times in 73 Posts
Thanked 2,002 Times in 1,123 Posts
ivank has a reputation beyond reputeivank has a reputation beyond reputeivank has a reputation beyond reputeivank has a reputation beyond repute
Re: Dividend taxation

Quote:
View Post
How is this with I.B. that is a Uk broker, for US dividends in Switzerland?
15% provided you've filled W8-BEN and nothing else
Reply With Quote
The following 2 users would like to thank ivank for this useful post:
  #20  
Old 28.09.2017, 09:09
martin959's Avatar
Forum Veteran
 
Join Date: Oct 2009
Location: St Gallen
Posts: 1,272
Groaned at 27 Times in 18 Posts
Thanked 577 Times in 329 Posts
martin959 has earned the respect of manymartin959 has earned the respect of manymartin959 has earned the respect of many
Re: Dividend taxation

Quote:
View Post
15% provided you've filled W8-BEN and nothing else
So, we basically would receive the 100% of the dividend, and then 15% we should pay it when the time comes to pay taxes here in Switzerland?

15% is not that bad
Reply With Quote
Reply

Tags
broker, dividend tax, dividends, tax, w8ben




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
UK LTD company assets & dividend taxation in Switzerland Landers Finance/banking/taxation 0 28.08.2015 11:10
Swiss high dividend stocks - your favorites? JJJJJ Finance/banking/taxation 47 05.04.2015 18:37
Handling dividend checks/cheques in Switzerland George Hawkins Finance/banking/taxation 6 27.05.2013 21:01
Specific question on new dividend taxation rules (Teilbesteuerung) ticino Business & entrepreneur 7 25.03.2008 22:03
Dividend Income Tax Doc Finance/banking/taxation 1 07.04.2007 11:55


All times are GMT +2. The time now is 18:21.


Powered by vBulletin® Version 3.8.4
Copyright ©2000 - 2021, Jelsoft Enterprises Ltd.
LinkBacks Enabled by vBSEO 3.1.0