Go Back   English Forum Switzerland > Help & tips > Finance/banking/taxation  
Reply
 
Thread Tools Display Modes
  #1  
Old 04.03.2021, 13:11
Murloc's Avatar
Forum Veteran
 
Join Date: Aug 2010
Location: Bern
Posts: 535
Groaned at 5 Times in 5 Posts
Thanked 593 Times in 297 Posts
Murloc has an excellent reputationMurloc has an excellent reputationMurloc has an excellent reputationMurloc has an excellent reputation
Withholding tax on dividends, fund domicile and ETF portfolio choice

I'm shaking up my financials and would like your input on this matter

After reading a bit, I gathered that the situation is the following (feel free to correct anything incorrect):
1. for this year, I can still buy US-domiciled funds on IB, but nothing is certain about next year
2. to get back the american withholding tax, it's best to buy US-domiciled funds for what concerns US securities, thanks to the double taxation agreement
3. except for that one, it's generally not worth it or possible at all to get back any other foreign withholding tax (i.e. with EU-domiciled funds with US securities, you're SOL for what concerns the american 15% WT tax)

My financial situation (I've been lazy and missed a year or 2 of investing there):

77% swiss francs (1/3 of these are earmarked for yet unknown backtaxes)
6.7% north american stocks
7.6% swiss stocks
8.7% other stocks

- due to pillar 3a regulations, those 40% swiss biased. These make up the largest part of my invested money. 3a just makes sense for my employment and life situation so that's not changing from my strategy. They are 100% equity at the moment.
- I'm not accounting for the second pillar yet as there's not much in it and I am not confident it will survive the boomer retirement meaningfully

about 65% of the stocks are in the usual fintech 3a stuff, the rest are in a robotrader so I can sell them and switch to my new cheaper portfolio at any time.


I'm thinking I'll go 80% total world and 20% swiss for my non-3a portfolio to have some home bias. I will likely never move away from Switzerland. This is similar to what the robotrader is doing and what other people recommend as well, so it seems reasonable.


My options:
1. throw all the remaining cash in VT while I still can
2. throw it on VTI + VXUS while I still can (cheaper but more complex to rebalance)
3. throw it just in VTI, and correct overexposure to the US over time (over 2022 it would be doable, and consider that my horizon is pretty long as I am young)

My thinking is that VT has a mix of stuff. Regulations and taxation agreements can change, and from 2022 onwards these funds will be locked except if I sell them due to the EU regulations being adopted here.
So should the situation happen that it's better to domicile certain stocks in one country or the other, if I have VT it will be impossible to extract this part without selling everything and switching to worse funds.
If I have VTI, I will have just US stocks in US-domiciled fund in there. So there is no mixing. And this is as cheap as it gets in terms of TER it seems, so it would seem good to fill up on this fund in particular before I'm locked out.

This is what got me thinking about going for option 3 at the moment, considering I'm heavily biased on switzerland as a starting situation anyway, and VTI is also cheaper and with more total invested money than VT so I like that a bit more.

What do you think?
Reply With Quote
  #2  
Old 05.03.2021, 12:14
Junior Member
 
Join Date: Mar 2020
Location: CH
Posts: 35
Groaned at 19 Times in 6 Posts
Thanked 8 Times in 7 Posts
wakame is considered unworthywakame is considered unworthywakame is considered unworthy
Re: Withholding tax on dividends, fund domicile and ETF portfolio choice

What works for you best depends whether you are an American or not
Reply With Quote
  #3  
Old 05.03.2021, 12:49
Murloc's Avatar
Forum Veteran
 
Join Date: Aug 2010
Location: Bern
Posts: 535
Groaned at 5 Times in 5 Posts
Thanked 593 Times in 297 Posts
Murloc has an excellent reputationMurloc has an excellent reputationMurloc has an excellent reputationMurloc has an excellent reputation
Re: Withholding tax on dividends, fund domicile and ETF portfolio choice

Quote:
View Post
What works for you best depends whether you are an American or not
forgot to write, I'm swiss in switzerland, and staying here.
Reply With Quote
  #4  
Old 05.03.2021, 13:29
Forum Legend
 
Join Date: Jul 2020
Location: Frick, Aargau
Posts: 2,876
Groaned at 62 Times in 50 Posts
Thanked 4,070 Times in 1,901 Posts
HickvonFrick has a reputation beyond reputeHickvonFrick has a reputation beyond reputeHickvonFrick has a reputation beyond reputeHickvonFrick has a reputation beyond reputeHickvonFrick has a reputation beyond reputeHickvonFrick has a reputation beyond repute
Re: Withholding tax on dividends, fund domicile and ETF portfolio choice

Quote:
View Post
I'm shaking up my financials and would like your input on this matter

After reading a bit, I gathered that the situation is the following (feel free to correct anything incorrect):
1. for this year, I can still buy US-domiciled funds on IB, but nothing is certain about next year
2. to get back the american withholding tax, it's best to buy US-domiciled funds for what concerns US securities, thanks to the double taxation agreement
3. except for that one, it's generally not worth it or possible at all to get back any other foreign withholding tax (i.e. with EU-domiciled funds with US securities, you're SOL for what concerns the american 15% WT tax)

My financial situation (I've been lazy and missed a year or 2 of investing there):

77% swiss francs (1/3 of these are earmarked for yet unknown backtaxes)
6.7% north american stocks
7.6% swiss stocks
8.7% other stocks

- due to pillar 3a regulations, those 40% swiss biased. These make up the largest part of my invested money. 3a just makes sense for my employment and life situation so that's not changing from my strategy. They are 100% equity at the moment.
- I'm not accounting for the second pillar yet as there's not much in it and I am not confident it will survive the boomer retirement meaningfully

about 65% of the stocks are in the usual fintech 3a stuff, the rest are in a robotrader so I can sell them and switch to my new cheaper portfolio at any time.


I'm thinking I'll go 80% total world and 20% swiss for my non-3a portfolio to have some home bias. I will likely never move away from Switzerland. This is similar to what the robotrader is doing and what other people recommend as well, so it seems reasonable.


My options:
1. throw all the remaining cash in VT while I still can
2. throw it on VTI + VXUS while I still can (cheaper but more complex to rebalance)
3. throw it just in VTI, and correct overexposure to the US over time (over 2022 it would be doable, and consider that my horizon is pretty long as I am young)

My thinking is that VT has a mix of stuff. Regulations and taxation agreements can change, and from 2022 onwards these funds will be locked except if I sell them due to the EU regulations being adopted here.
So should the situation happen that it's better to domicile certain stocks in one country or the other, if I have VT it will be impossible to extract this part without selling everything and switching to worse funds.
If I have VTI, I will have just US stocks in US-domiciled fund in there. So there is no mixing. And this is as cheap as it gets in terms of TER it seems, so it would seem good to fill up on this fund in particular before I'm locked out.

This is what got me thinking about going for option 3 at the moment, considering I'm heavily biased on switzerland as a starting situation anyway, and VTI is also cheaper and with more total invested money than VT so I like that a bit more.

What do you think?
Just a quick comment that Finpension let you invest 100% outside of Switzerland in your 3a.
Reply With Quote
This user would like to thank HickvonFrick for this useful post:
  #5  
Old 06.03.2021, 07:25
Newbie 1st class
 
Join Date: Apr 2018
Location: Genève, GE
Posts: 10
Groaned at 0 Times in 0 Posts
Thanked 2 Times in 2 Posts
FunnyDjo has no particular reputation at present
Re: Withholding tax on dividends, fund domicile and ETF portfolio choice

Every investment inside a 3rd pillar is easy as you don't declare it under the wealth tax and in the other revenue section of the tax declaration. In Viac, you can invest 97% in share and use chf hedge etf to increase your world exposition (with MSCI world etf). But the limit remains lower than 7000 chf by year.
IB is a good alternative for investment above this limit. If i understood well to ease the paperwork on withholding tax it is best to select etf recognise by ICTax.
I have found this blog that detail the subject
Swiss tax guide for etf investor
Reply With Quote
  #6  
Old 20.07.2021, 13:17
kiwiguy08's Avatar
Forum Veteran
 
Join Date: Apr 2008
Location: Zürich
Posts: 1,382
Groaned at 61 Times in 46 Posts
Thanked 1,195 Times in 608 Posts
kiwiguy08 has an excellent reputationkiwiguy08 has an excellent reputationkiwiguy08 has an excellent reputationkiwiguy08 has an excellent reputation
Re: Withholding tax on dividends, fund domicile and ETF portfolio choice

Quote:
View Post
What works for you best depends whether you are an American or not
Dumb question, but why? Are US citizens exclude from finpension?
Reply With Quote
Reply

Tags
etf, portfolio, vanguard, vti, vxus




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
Incorporation of a GmbH - Domicile baloo Business & entrepreneur 0 24.02.2020 16:33
pension fund convertion to disability fund, is it legitimate? tailgate Family matters/health 2 29.03.2015 13:40
justificatif de domicile happyrobbie Permits/visas/government 2 04.02.2013 12:07
Losing UK Domicile? dannyt986 Finance/banking/taxation 40 05.09.2008 10:56


All times are GMT +2. The time now is 07:52.


Powered by vBulletin® Version 3.8.4
Copyright ©2000 - 2022, Jelsoft Enterprises Ltd.
LinkBacks Enabled by vBSEO 3.1.0