Withholding tax on dividends

[Philippe]

I am a Swiss citizen and resident in Switzerland. I have been managing my securities portfolio with DEGIRO for 1 year (after leaving SWISSQUOTE to find more attractive fees). I received dividends on shares on which a 30% withholding tax was deducted.
I have several questions:
- Are there any Swiss-Holland agreements that allow you to recover all or part of the withholding tax collected ?
- If not, do I risk double taxation in Switzerland or is it sufficient for me to declare the withholding tax when I file my tax declaration ?

Hi everyone and thanks in advance for your comments

 

[Baptiste Wicht]

Hi Philippe

Unfortunately, not that I know of. If you are using DEGIRO, I think you are stuck with 30% withholding. I am guessing that these are US stocks. In this case, you can still reclaim them. If it was for a UCITS ETF, they would be lost.

The dividends will be taxed as income in Switzerland, but you have to declare them anyway. Normally, you should be able to reclaim the withholding in your tax declaration.

 

[Philippe]

Thank you Baptiste for your prompt answer

It was not an ETF, a german stock (Allianz)

I will wait for the next tax return to see the reaction of the tax authorities, but I am considering using a platform in Switzerland for dividend stocks, but I do not want to return to Swissquote. Is there a more competitive platform to recommend?

 

[Baptiste Wicht]

30% for German stocks seems weird, I was thinking it should be something like 26.3%. Switching to a Swiss broker is unlikely to help in that regard. In both cases, you may get WHT and then get a refund.

Saxo is cheaper than Swissquote

Saxo Bank Review 2024 - Pros & Cons - The Poor Swiss

Saxo has significantly reduced its fees, is it good now? This in-depth review covers this broker in detail to see whether we should use it.

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[Yavin4]

Hi Philippe

Unfortunately, not that I know of. If you are using DEGIRO, I think you are stuck with 30% withholding. I am guessing that these are US stocks. In this case, you can still reclaim them. If it was for a UCITS ETF, they would be lost.

The dividends will be taxed as income in Switzerland, but you have to declare them anyway. Normally, you should be able to reclaim the withholding in your tax declaration.

Was actually researching this issue recently and chanced upon the thread. Can you explain the problem of not reclaiming UCITS ETF dividends ?

I have been perusing these dividend stocks recently but still not worked out if any use as a Suisse resident :
Realty Income Corp o:xnys
JPMorgan Equity Premium Income NYSE:JEPI
YieldMax NVDA Option Income Strategy NYSE:NVDY

I’m thinking, if I read you right Baptiste, that US stocks (eq) are the better way to go with dividends here?

Thanks , Marc

 

[Makis]

I am a Swiss citizen and resident in Switzerland. I have been managing my securities portfolio with DEGIRO for 1 year (after leaving SWISSQUOTE to find more attractive fees). I received dividends on shares on which a 30% withholding tax was deducted.
I have several questions:
- Are there any Swiss-Holland agreements that allow you to recover all or part of the withholding tax collected ?
- If not, do I risk double taxation in Switzerland or is it sufficient for me to declare the withholding tax when I file my tax declaration ?

Hi everyone and thanks in advance for your comments

Just to add, I also use Degiro and signed the W8-BEN form. I now receive dividends from US source with only 15% already withheld tax.

 

[Baptiste Wicht]

Can you explain the problem of not reclaiming UCITS ETF dividends ?

It's not a problem, but a lack of efficiency.

With US ETF, you can fully reclaim back the dividend withholding from US stocks. With UCITS ETF, you will lose 15% of US dividends.

I’m thinking, if I read you right Baptiste, that US stocks (eq) are the better way to go with dividends here

Not necessarily. If you own US stocks directly, you will indeed have the same tax efficiency as a US fund. However, the problem with dividend efficiency is mostly with US (and a little with Japan). For single stocks, there are all as efficient as their own country. So, if you want to invest in dividend stocks, you should still diversify internationally.

 

[Daniel]

I bring up the topic again to ask more questions about taxation. In my case, everything I read led me to buy this ETF:

Invesco MSCI USA UCITS ETF. The reason is that it's domiciled in Ireland, so I believe I should only pay a 15% dividend withholding tax. It’s in EUR (although I’m not sure if that’s positive or negative), and it’s an accumulation ETF, meaning these dividends will be paid when I sell the ETF (the idea is after 30 years), helping compound interest.
Am I correct so far?

More questions: I’m also interested in VT or VTI, but I read that because they’re domiciled in the US and not Ireland, the tax treatment is more complicated or higher compared to ETFs domiciled in Ireland. (Is it correct? Any suggestions from your experience to improve it are welcome)

Sorry for the long post, and I hope my question helps others

 

[Baptiste Wicht]

Am I correct so far?

Yes. Dividends will be paid into the fund and you will "receive them" when you sell. But you will be taxed on them nonetheless every year.

More questions: I’m also interested in VT or VTI, but I read that because they’re domiciled in the US and not Ireland, the tax treatment is more complicated or higher compared to ETFs domiciled in Ireland. (Is it correct? Any suggestions from your experience to improve it are welcome)

No, it's not correct

US ETFs are more efficient than Ireland ETFs, you save on the 15% dividends

What Makes U.S. ETFs So Great? - The Poor Swiss

U.S. ETFs are the most efficient ETFs for Swiss investors, find out how to save money and optimize your portfolio!

thepoorswiss.com

But it's true that it can make estate tax more complicated although I think this issue is a bit blown out of proportions.

Should Swiss Investors Worry About The U.S. Estate Tax In 2025? - The Poor Swiss

Many think investing in the United States Exchanged Traded Funds (ETFs) is dangerous. They believe that because of the U.S. Estate Tax, they will lose a lot

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[Daniel]

Having this information would have saved me hours of searching for information. Everything I found favored accumulation ETFs, as the information stated that dividends were paid, but they were all paid together when the ETF was sold, not year by year, which helped with compound interest.

Yes. Dividends will be paid into the fund and you will "receive them" when you sell. But you will be taxed on them nonetheless every year.


No, it's not correct
Nice¡

US ETFs are more efficient than Ireland ETFs, you save on the 15% dividends

What Makes U.S. ETFs So Great? - The Poor Swiss

U.S. ETFs are the most efficient ETFs for Swiss investors, find out how to save money and optimize your portfolio!

thepoorswiss.com

But it's true that it can make estate tax more complicated although I think this issue is a bit blown out of proportions.

Should Swiss Investors Worry About The U.S. Estate Tax In 2025? - The Poor Swiss

Many think investing in the United States Exchanged Traded Funds (ETFs) is dangerous. They believe that because of the U.S. Estate Tax, they will lose a lot

thepoorswiss.com

And regarding Ireland, I always read that it was 15%. But well, with this information, I think that without overthinking it, my future investment will go to VTI or VT.

 

[Baptiste Wicht]

Having this information would have saved me hours of searching for information. Everything I found favored accumulation ETFs, as the information stated that dividends were paid, but they were all paid together when the ETF was sold, not year by year, which helped with compound interest.

Dividends are indeed accumulated into the fund. I only said that you are going to pay taxes on it every year, because of the Swiss tax system. But there is not much of a compounding advantage because you can reinvest dividends yourselves. In some countries (not Switzerland), there are some tax advantages to accumulating ETFs.

And regarding Ireland, I always read that it was 15%. But well, with this information, I think that without overthinking it, my future investment will go to VTI or VT.

Yes, Ireland is 15%, but US is effectively 0