Dividend taxation

[spark]

Good morning,

I was looking at the brokerage rates of some cantonal banks. I can't find much about dividend levies. Generally 15% are already levied at the base. Is there a second levy on arrival?

Sincerely

[Jerome]

for Swiss securities it is 35% of withholding tax, recoverable when declared on the income part of the tax return
for foreign securities such as US it is 15% of non-recoverable foreign tax + 15% of recoverable Swiss tax when declared on the income part of the tax return

[spark]

Which represents approximately 30% if we do not declare in Switzerland I suppose.

Sincerely

[Jerome]

If you are not a Swiss resident I suggest you look at this post

[spark]

It's a real gas factory.

In view of the changes underway, is it not better to be subject in all and for all to the Swiss advance levy which gives an average of 30 % and some. It is true that it seriously weighs on the reinvestment of dividends if we add the commissions and possible custody fees.

Sincerely

[birdienumnum]

The best is not to pay taxes on dividends at all, either through companies that traditionally reimburse a part of the nominal value of the share (capital gain in Switzerland not taxable for the Swiss), or through companies that pay their dividends by drawing on their reserves (according to a recent tax law in force for 2 years if I am not mistaken). The real estate companies Swiss Prime Site, Mobimo, All Real and Warteck are part of the first group and there is nothing to indicate that they will not continue to do so (reimbursement of nominal value vs. dividend).
As for the 2nd group (reimbursement via reserve), it is not certain that a company that has practiced this policy this year will be able to do so again in the future. Rieter, ABB, Komax, Zurich Insurance, Inficon, Swissquote, Swisslife, BCV (partly), SGKB (partly), to name just a few examples, have done so. To my knowledge, Walter Meier has not been able to do so this year.

My recommendations:

SPS, Mobimo, All Real: hold, buy on the dip
Warteck: bond proxy
Komax: hold, buy under 55
Zurich, ABB, BCV: buy & hold
Inficon: strong buy
Rieter, Swissquote: accumulate

[Jerome]

Thank you birdienumnum for these enlightened comments.

spark, it is true that dividend taxation is in itself a gas factory...
Personally I don't take it into account, I know that on my US securities I lose 15%, the other 15% helping me in some way to pay my income tax

That's not bad, but we must not forget that income from work costs much more in acquisition costs (food, transport, clothing) and taxes (social charges, income tax)... I will soon post an article on this subject by the way

[spark]

Thanks for the info,

I looked at these rates on a cantonal bank (rates from trade direct.ch)
http://www.tradedirect.ch/media/pdf/tradedirect/fr/tarif_tradedirect.pdf
On the Euronext 19.90 from 0 to 2000 euros it seems a lot what do you think?

Should portfolio line builds be done in small increments over time rather than a one-time purchase?

What is Bond proxy?

Sincerely

[Jerome]

swissquote is even more expensive:
http://www.swissquote.ch/sqweb/trading/fees/fees_private_clients.jsp

In my opinion it is better to spread out your purchases... it smooths out the risk of coming home at a bad time.

[spark]

There is Lynx in Belgium, very good rates but it is only a broker (in case of bankruptcy what about the positions) and as it is Belgium it is still different on dividends. I have been racking my brains with this for a while but there is nothing really ideal.

Sincerely

[Jerome]

It all depends on what you want to do, but if you are focused on long-term dividend growth, brokerage fees shouldn't scare you too much.

I was previously at e-sider (ex tradedirect)
it was not bad, and there is the cantonal bank of Vaud behind it, so it is solid

If I left, it's because I decided to place my orders directly via my bank's online platform because the rates weren't that dissuasive and, above all, my transactions weren't frequent enough.

otherwise swissquote is also well done

[spark]

BCV still offers TradeDirect.

I think I will follow the long-term investment with reinvested dividends. But being already 54 years old and having some health problems, it is clear that time is important to me. BCV is solid indeed.

On the other hand, according to what you told me about taxation in Switzerland, (unless I am mistaken) let's suppose that I have a line of 5000 euros on an English title with a yield of 4%. I will receive a dividend of 200 euros less the 15% taken at the base, therefore 170 net to which a levy of 15% will be applied in Switzerland, i.e. 144.50 all levies deducted.

It could take a considerable amount of time by reinvesting so little per year, right?

Sincerely

[Jerome]

if you receive 100 EUR in dividends for example
15 EUR goes directly to the non-recoverable foreign withholding tax
15 EUR goes directly to Swiss withholding tax

If you invest in low beta stocks that are not very sensitive to the market, you can afford to be more honest, because the risk of making a mistake is lower.

Moreover, the market is currently valued correctly, no more, no less, so the situation is not too bad, but not ideal either.

I would still keep some cash, it can always be useful in these times
There is no point in getting impatient and wanting to invest everything right away.
Having cash is always nice when investing in dividends

[spark]

Thanks for this info
On the other hand, I think you still have to build the positions gradually for the smoothing effect.

Maybe also see some vanguard etfs with reduced fees

Sincerely

[dom67]

Good morning,

Are any of you invested in equity, bond or mixed funds and/or ETFs?
I read that in Switzerland it is necessary to declare the return on securities contained in Funds/ETFs as income even though the money is reinvested.
If this is true, how can we know what part of the performance corresponds to yield and what part to added value?
Better yet. What happens if the market goes down?
Example: Decrease of 20%, return of 5%.
My fund which was worth 100 is now only worth 80. If we add the yield it is worth 85.
So I lost 15 but have to declare the 5 as income. Am I right or wrong?
If anyone has experience in this area, I'm interested. Thanks in advance.
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