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Old 08.07.2017, 14:28
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Trading not professionally stock options

Hello guys,
i looked over and over but i could not find the answer to this.

I usually trade stock options, but just selling them and let them expire. Probably 50 transaction/year.
How are they taxed here?

Let me also recap what i've understood (or think of) about dividends.

1) swiss company with swiss dividend: i pay 35% but they will be refunded when i'll fill tax return.

2) foreign company. Probably the brokers (mine is IB) will withold tax for the country in which stock is issued. Then i should declare them in the tax return at the exchange rate i got at time of ex-div date? For example, Italian company pays a div. They get taxed at 26% or 27%, don't remember. Any chance i avoid double taxation here and there?

3) Do i have to fill a tax return with all these even if i'm below 120k threshold? I assume yes if i want to get back swiss dividend tax...
4) do you have any tax filling guide for geneve canton? English would be the best but i can try to read it in french. The thing is, not knowing the language, i cannot even find such resource on the internet.

Thanks a lot
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Old 08.07.2017, 16:07
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Re: Trading not professionally stock options

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I usually trade stock options, but just selling them and let them expire. Probably 50 transaction/year.
With that kind of activity your trading actually can be labelled professional, in which case it's taxed like a self employment activity: net capital gains (losses are deductible) are taxed as your personal income, plus you'd owe 10.25% AHV on it.

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3) Do i have to fill a tax return with all these even if i'm below 120k threshold?
If you're taxed at source, the threshold for filing in GE is normally 500k. But if you make too much gains from your professional trading and dividends I'm sure they'd like to hear about it and send you a bill. In ZH the threshold is 2500 non taxed at source income per year, I don't know what's it in GE. Obviously if they do that then you can invoke tax treaties and get a credit for non reimbursable foreign withholding taxes.
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Old 08.07.2017, 17:00
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Re: Trading not professionally stock options

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With that kind of activity your trading actually can be labelled professional, in which case it's taxed like a self employment activity: net capital gains (losses are deductible) are taxed as your personal income, plus you'd owe 10.25% AHV on it.


If you're taxed at source, the threshold for filing in GE is normally 500k. But if you make too much gains from your professional trading and dividends I'm sure they'd like to hear about it and send you a bill. In ZH the threshold is 2500 non taxed at source income per year, I don't know what's it in GE. Obviously if they do that then you can invoke tax treaties and get a credit for non reimbursable foreign withholding taxes.
Thanks. Actually i could reduce my number of operations to 30, that would not be a problem. Just sell puts with longer expirations will do the trick.

I'm taxed at source, My gains would be something like 10% of my gross income per year so i don't think that would be a problem. But i would like to fill the tax return anyway because i don't want to get that 35% tax on swiss dividends.
What about foreign stocks and the other points?

Thanks a lot
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Old 08.07.2017, 17:27
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Re: Trading not professionally stock options

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Thanks. Actually i could reduce my number of operations to 30, that would not be a problem. Just sell puts with longer expirations will do the trick.
The bigger problem is that you're trading options at all. If you intend to achieve profit with them, as opposed to just insuring your existing positions, it's a strong indicator of potential professional trading in the eyes of swiss tax authorities

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But i would like to fill the tax return anyway because i don't want to get that 35% tax on swiss dividends.
Talk to the tax office then, they might let you fill a reduced tax declaration for this case. But double check that you won't just end up owing even more taxes - French cantons have crazy steep tax progression, I wouldn't be surprised to hit 30-35% marginal rate already at a normal job income

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What about foreign stocks and the other points
It should be possible in principle to reclaim a part of withholding taxes directly from the foreign government. The swiss would only reimburse you the non reclaimable part, 15% usually (depends on country and treaties), and only if you are going to be paying taxes on this income here to prevent double taxation.

Ideally just buy US stocks and ADRs if you can - a LOT cheaper to trade and 15% withholding at most with proper setup
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Old 04.05.2020, 17:23
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Re: Trading not professionally stock options

OP, so how was you options trading classified by tax office after all?
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Old 04.05.2020, 18:43
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Re: Trading not professionally stock options

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OP, so how was you options trading classified by tax office after all?
I doubt he told them so they have no idea
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Old 04.05.2020, 20:12
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Re: Trading not professionally stock options

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I doubt he told them so they have no idea

Wouldn't that be tax evasion and punishable?
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Old 04.05.2020, 20:31
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Re: Trading not professionally stock options

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Wouldn't that be tax evasion and punishable?
In Switzerland unless the tax evaded is 200k a year it's not a criminal matter, until a couple of years ago there was no upper limit as Tax evasion was not a criminal offence, historically this allowed the Swiss not help other governments over tax evasion.
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Old 05.05.2020, 11:42
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Re: Trading not professionally stock options

You start talking about selling options, and then ask about dividends. I don't see how that's related to options. Gains from trading options are not the same as dividend income, and I believe are taxed differently.
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Old 05.05.2020, 15:44
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Re: Trading not professionally stock options

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You start talking about selling options, and then ask about dividends. I don't see how that's related to options. Gains from trading options are not the same as dividend income, and I believe are taxed differently.
He may hold the stock as well.
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Old 05.05.2020, 19:27
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Re: Trading not professionally stock options

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You start talking about selling options, and then ask about dividends. I don't see how that's related to options. Gains from trading options are not the same as dividend income, and I believe are taxed differently.

So how they would be taxed? Added as regular income?
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