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Old 03.07.2019, 20:40
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Advice on investing in ETFs

Hello everybody,


I am a young professional and a newbie in investing. I have done my fair share of reading on the topic, including the Switzerland-specific info by searching in this forum. I have decided on investing on a S&P500 ETF, a popular choice. However, I still have some questions on the very specific details regarding Switzerland (taxes etc.) what is the step by step process, which specific ETF to choose, and so on.



1. First of all, is it right that I should open some sort of investing account in a bank to hold my assets? Is UBS a good choice since I am already a client? How would I proceed to buy and sell funds? Is it done easily via ebanking?


2. Any advice on a specific S&P500 ETF that I should choose, regarding brokers / domicile of the fund etc? Is going the easy way with UBS the correct one?



3. What should I know about taxes? It is my understanding that in Switzerland there is a 35% withholding tax on dividends, but no capital gain tax, which should make accumulating ETFs more preferable. However, searching the EStv Kursliste as suggested in some other topic, it turns out even accumulating ETFs incur taxes, and comparing a UBS ETF with a similar iShares ETF, the UBS one had 1/3 of the tax. What is the reason? I am a EU citizen on a B permit if that is relevant.


Sorry for the wall of questions and thanks in advance to anyone that might be interested to help!
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Old 03.07.2019, 21:47
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Re: Advice on investing in ETFs

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1. First of all, is it right that I should open some sort of investing account in a bank to hold my assets? Is UBS a good choice since I am already a client? How would I proceed to buy and sell funds? Is it done easily via ebanking?
Buying and selling securities by UBS e-banking is indeed straightforward, and the bank will automatically open a custody account for them. But their custody charges, calculated as a percentage of the value of the securities, are much larger than for PostFinance, which charges a fixed custody fee of only CHF 90 per annum, independent of the value, and this serves as a credit that can be applied towards transaction fees. This can result in a useful reduction in your taxes, since you can claim the much higher custody fee forfait in your tax declaration.
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Old 04.07.2019, 06:40
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Re: Advice on investing in ETFs

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3. What should I know about taxes? It is my understanding that in Switzerland there is a 35% withholding tax on dividends, but no capital gain tax, which should make accumulating ETFs more preferable. However, searching the EStv Kursliste as suggested in some other topic, it turns out even accumulating ETFs incur taxes, and comparing a UBS ETF with a similar iShares ETF, the UBS one had 1/3 of the tax. What is the reason?
UBS ETF 33079304: Value = CHF 13.18; yield = CHF 0.213. (1.62%)
iShares ETF 19328353: Value = CHF 43.22; yield = CHF 0.682. (1.59%)
So the tax payable on the same capital investment in these two funds is almost the same.
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Old 04.07.2019, 15:08
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Re: Advice on investing in ETFs

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UBS ETF 33079304: Value = CHF 13.18; yield = CHF 0.213. (1.62%)
iShares ETF 19328353: Value = CHF 43.22; yield = CHF 0.682. (1.59%)
So the tax payable on the same capital investment in these two funds is almost the same.

That seems like a pretty high tax... How is it calculated? Is it a flat rate (in which case you could even lose money) or a percentage on gains?
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Old 04.07.2019, 15:16
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Re: Advice on investing in ETFs

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That seems like a pretty high tax... How is it calculated? Is it a flat rate (in which case you could even lose money) or a percentage on gains?
That's not the tax, johnnytifosi, it's the yield on which you would pay tax at a rate that depends on all your other sources of income, and the deductions available to you.
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