Dividend taxation

[swx]

Thanks Jérôme for all the references indicated:
Declaration of securities
POSTFINANCE provides on request and for 200. chf the tax statement of Values and returns as of December 31, classified into 5 headings. I suppose that we can do the same with other banks.
As for the request for reimbursement of the additional US withholding tax, it must reach a certain amount.
If you can tell me on which form it says: Gross yield not subject to withholding tax, I'm interested...

[Jerome]

All banks and brokers provide a tax statement. You just have to ask them, but it is usually quite expensive.
I just realized that for Valais I provided the 2011 reference. Here is the link for 2013:
http://www.vs.ch/Data/formule/DS_10/fml_0000001963.pdf
You will find the gross yield, the non-recoverable foreign tax portion and the additional US withholding tax indicated there.
Gross returns not subject to withholding tax must be included in the tax return, in the Statement of Securities. If you want to declare them of course…
As I said, for all this crap the easiest thing is to use the software provided by the tax authorities. Otherwise it's a gas factory...

[dom67]

Since my question only concerns the taxation of dividends, I will continue the discussion here regarding IB (or another foreign broker).
Let's be clear, my goal is not to evade tax in Switzerland but only to ensure that there is no double taxation of dividends and that the withholding tax made in the country of origin will be recoverable.
Guyem only has US shares at IB, so I still don't have the answer.
I had taken Germany as an example but it could be France. So what about the taxation in Switzerland of a French dividend from a security purchased via a foreign broker. If anyone has the answer, that would allow us to close this point.

[swx]

Tax statement:
As far as I'm concerned, it clearly indicates that a real estate fund has REIT status, i.e. no wealth tax or income tax, which is the case, for example, with CS LIVING PLUS, etc.
or on the other hand those who do not benefit from this status: FIR real estate fund Romand, ANFOS – etc.
Otherwise, I don't see where to find this kind of information.
It clearly states the 5 data to indicate for an American title which pays quarterly income –
The collection of a quarterly coupon must be recorded at the conversion rate of the day, + at the end the rate fixed by the federal administration of Contributions, in respect of the assets it represents.
I am waiting for the response from the tax authorities to find out if the tax statement would be accepted, given that it provides all the information requested on their securities statement form.

[Jean@Louis]

Jerome said

So: everything is played out during the annual taxation. There are one or two forms to fill out to request a refund of the flat-rate imputation (other countries) or the additional USA withholding.
For Valais: http://www.vs.ch/Data/formule/DS_10/fml_0000001963.pdf (US+other countries)
For the canton of Vaud:
http://www.vd.ch/fileadmin/user_upload/organisation/dfin/aci/fichiers_pdf/DA-1_2013.pdf (other countries)
http://www.vd.ch/fileadmin/user_upload/organisation/dfin/aci/fichiers_pdf/R-US_164_2013.pdf (USA)
I haven't found any for Geneva.

This is heavy and complex. To avoid racking your brains, it is best to use the software provided by the cantonal administrations; the forms for refunding withholding tax, additional USA withholding tax and flat-rate imputation are done automatically.

I completed my tax return (Geneva) today by indicating the additional US withholding tax and the flat-rate tax imputation for US securities. It takes a little time (the "price to pay" when you have shares in many US companies), but ultimately it is not that complicated. Note that you can do it only on condition that you must recover at least a total of CHF 50 of flat-rate tax imputation (i.e. you must have received at least USD 334 in dividends during the year). I did not request a tax statement from Postfinance, I simply attached all the dividend receipts as well as the document indicating the status of the portfolio as of 31.12. If I learn anything from this experience, I will share it on this forum...

[Jerome]

Yes, that's exactly what I've been doing for many years and it works very well. No need for a tax statement, the portfolio status as of 12/31 and the supporting documents for coupons/dividends are enough. Never had a problem with the tax authorities. And then it takes time the first year to put the securities in the software provided by the tax authorities, but since we can reuse the data for the following year, there are only the portfolio changes to enter (and they are few in number as far as I'm concerned). Note that on VStax for example the dividends received and the value as of 12/31 of each security are updated automatically for a large majority of securities which is very appreciable.

[dom67]

Jerome said
So: everything is played out during the annual taxation. There are one or two forms to fill out to request a refund of the flat-rate imputation (other countries) or the additional USA withholding.

After consultation with
http://www.estv.admin.ch/intsteuerrecht/themen/01314/01315/index.html?lang=fr
I'm not sure I understood correctly.

Can the withholding tax and, for the USA, the additional levy, be fully recovered when filing the tax return in Switzerland or is there a non-recoverable portion of foreign tax remaining?

Taking the USA, Germany and France as examples, the figures cited in the various documents could give:

USA: Withholding tax = 30 %, Swiss tax relief = 15 %, Non-recoverable foreign tax = 15 %

Germany: Withholding tax: 25 % + solidarity supplement = 26.375 %, Swiss tax reduction = 10 %, Non-recoverable foreign tax = 15 % (16.375 %)

France: Withholding tax = 30 %, Swiss tax relief = 15 %, Non-recoverable foreign tax = 15 %

Please correct if this is wrong!

[Jerome]

I never really thought too much about these differences between countries, but I always understood it more or less like this:
– one part, generally about half, concerns the Swiss tax share that must be declared if the amount is to be recovered (which will be deducted from the next tax bill). In return, this amount will be considered as income, as for a Swiss security.
– another part concerns the tax that goes to the country of the title in question and which is not recoverable. On the other hand, this amount must be declared to the Swiss tax authorities in order not to be taxed on this part.
This is how I understand it, I have never tried to dig into more detail because I consider that the fundamentals of dividends are more important than the tax aspects. If experts in the field have information on this subject, they are welcome.

[guyem]

Being a bit "pissed off" with Boursorama about the request for exemption from advance payment on dividends (which I made and which was not applied by Bourso,,,,,,,), I directly contacted the management of the CDI on which I depend and I received the following explanation concerning the tax treatment of dividends for a French resident (some additional details can be found in the 2047)

Dividends generated by investments in the capital of companies constitute taxable income, regardless of whether the companies are French or foreign.
Article 9 of the 2013 Finance Act No. 2012-1509 removed the flat-rate withholding tax for dividends received from January 1, 2013 and the annual fixed deduction for those received from January 1, 2012.
All dividends are now compulsorily taxed according to the progressive income tax scale,
Furthermore, they are subject to a compulsory withholding tax at the rate of 21 %.
This non-liberatory deduction of income tax is chargeable in the form of a tax credit on the amount of tax due after application of the progressive income tax scale.
However, it is possible to be exempted from this, on request, if the reference tax income for the previous year does not exceed a certain ceiling,
1 – Taxation on a progressive scale
These incomes are declared for the amount received, i.e. after deduction of any collection costs (various costs declared in box 2CA)
They are taxable according to the progressive IR scale, according to 2 possible methods:
– With deductions
– Without deductions
a – income eligible for the 40% deduction
This applies to dividends from shares and income from shares distributed by companies subject to corporation tax or an equivalent tax (or subject to this tax by option) having their registered office in France, in a State of the European Community or in a State or territory having concluded a convention with France for the avoidance of double taxation, provided that, since 1.1.2009, the said convention contains an administrative assistance clause for the purpose of combating tax fraud or evasion. These distributions must result from a regular decision of the competent bodies of the company.
b – income excluded from the 40% deduction: taxation on the first euro

The 40 % reduction does not apply to amounts paid in addition to dividends, which are presumed to be distributed income.

The following income is targeted:
– Products distributed by certain companies (investment companies whose activity is the management of securities portfolios, investment companies with a predominance of variable capital SPPICAV, listed real estate investment companies SIIC)
– Distributed products not resulting from a regular decision
(Profits deemed disinvested, distributions not taken from profits, increases in profits, hidden distributions and remuneration, lavish expenses, indirect or disguised distributions, advances, loans or deposits from partners, attendance fees)
These incomes are subject to the tax scale from the first euro.
Only possible deduction: financial charges paid during the year
Income from foreign structures subject to a privileged tax regime (article 123 of the CGI) is also taxable, whether or not there is distribution.
2 – The compulsory withholding tax of 21%

a) compulsory but no longer liberating levy
The compulsory levy applies to the gross amount of income received, without deduction of costs,
It is liquidated by the paying institution on the dividends to be paid, at the same time as the social security contributions.
It is deducted from the income tax of the following year, in the form of a tax credit,
Any excess is returned.

example: the compulsory deduction incurred in 2013 will be charged on the tax to be paid in 2014 on 2013 income

(b) exemption from income-based levy
Individuals belonging to a tax household whose reference tax income for the penultimate year is less than €50,000 (single, divorced or widowed taxpayers) or €75,000 (taxpayers subject to joint taxation) may request to be exempted from the levy.

In accordance with article 242 quater of the CGI, the request for exemption must be made, under the responsibility of the taxpayer, before November 30 of the year preceding that of payment to the paying establishment (which is in turn required to produce it upon request from the administration.
It takes the form of a sworn statement by which the taxpayer states that his reference tax income N-2 meets the conditions cited above.
This certificate must be produced to the persons responsible for paying the income.
Exceptionally for 2013, the request could be made until March 31.
For dividends and interest collected in 2014, the request for exemption from withholding tax had to be made before November 30, 2013 to the paying institution.

(c) withholding tax
Income received by individuals domiciled in France is subject to income tax. Value = gross value in euros based on the rate on the day of payment, after deduction only of tax paid abroad.
Impact of international conventions: most conventions avoid double taxation and provide for the imputation of foreign tax on French tax, or a reduction in its place.
Some agreements provide for the reimbursement of tax collected at source. In the absence of an agreement, no imputation but taxable base = base net of tax already paid. Income received abroad must be declared on form 2047.

good reading

[dom67]

I finally found what I was looking for.
In http://www.bcv.ch/en/content/download/15808/160242/Releve_fiscal
There is a very clear example:

Mr. Dupont, domiciled in Switzerland, holds various positions
Austrian shares. When the coupons mature, he collects
dividends and the accumulation of accounts is presented
as follows:
Gross income EUR 1,500.00
Withholding tax 25 % EUR – 375.50
=========================
Net income credited EUR 1,125.00

This tax withholding made by the authorities
Austrian tax breaks down as follows:
Recoverable part (10 %) EUR 150.00
Non-recoverable portion (15 %) EUR 225.00
=========================
EUR 375.00

Mr. Dupont, when filing his tax return in Switzerland,
will therefore be taxed on an income of EUR 1,500 (converted
in Swiss francs), while Austria has already adopted a
tax on the same income. He therefore suffers a double
taxation.
According to the Convention established between Switzerland and
Austria, Mr. Dupont has the opportunity to avoid the double
taxation by recovering the share of 10 %, or EUR 150.
plus, he can deduct the non-recoverable portion of 15 %, i.e.
EUR 225, on the taxes he will pay in Switzerland (DA-1).

Paradoxically, the recoverable part is therefore the most difficult to recover because it must be done via the tax administrations of the different countries. This is why banks offer this service (very expensive as usual: flat rate + % on the amounts recovered) to their customers.

[Jerome]

Very interesting example, but this problem only arises for non-US securities, since the reimbursement of the additional US withholding tax is made directly to the tax administration during taxation. Once again, US dividends are more interesting...
And you're right, this type of banking services are overpriced... I asked several banks for tax statements and it amounts to several hundred francs. Nonsense.

[Mystic]

I am just discovering this post and am currently filling out the document in question.

Having shares in Germany, I fill out the form for the authorities of our northern neighbor. It is indicated, as documents for the tax authorities, that one can attach the bank statement of the dividend payment. So the PDF document that one receives after the dividend payment is sufficient. In any case, we need this document later for the tax return.

So you just have to make a copy of the document sent to the Swiss tax authorities and send it with the request. It's not complicated and much cheaper than asking for such a statement from the banks.

Since this is the practice of the German authorities, I see no reason why the EU authorities should not also accept the same document. For the USA, as mentioned above, we already have such a form with the tax declaration.

[HowBy]

regarding the year of taxation of dividends (US source only in my case) can someone confirm for me if it is indeed the year of RECEIPT of dividends which counts for the Swiss tax authorities, and not the year of declaration or the year of the "ex-dividend".

This is far from trivial in my case, because I am expecting juicy dividends that will become "ex-dividend" at the end of December and this is my first year of investing. So I want to know if I should liquidate just before the Ex-div date, or if I will be taxed in 2016 or 2017 for the corresponding dividends, which I will only receive in January. I am on IB and they include in my current balance the unrealized dividends (accrued) from the ex-div date, but they give me a report on the dividends collected and the US tax deducted (15%) before collection.

Examples of titles:
PSEC monthly dividend ex-div on December 28 payment around January 20
Quarterly ARI ex-div December 28 payment around January 15

If anyone is in a similar situation I would be happy to discuss further, as this is all still unclear to me and I am feeling my way.

[Jerome]

I have the same situation with several titles.
Taxation is always based on the payment date, which makes sense because the cash only appears in the account at that time.
But I don't really see what difference it makes in the end, you'll have to pay tax one year or another anyway.
Unless, as you say, you want to sell before the dividend, to keep the capital gain and not be taxed on the distributions (a strategy that is only valid if you are Swiss, therefore not taxed on the capital gain). But in this case you don't care about the year, since you are selling before the ex-date anyway. And in the long term I don't think selling to avoid being taxed on a dividend is productive.
Note that on IB you can configure your reports and you can indicate each position separately on your tax return.

[HowBy]

Thank you for these details.
In the old days there was a saying: "a tax deferred is a tax saved", because interest rates were high. Today the difference is less, but I still prefer to pay 1 year later.
The taxman could very well impose the tax on the ex-div date, because the dividend is then irrevocably acquired. So much the better if he does not.

[Author]

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