Trader's Taxation in Switzerland

S

syspool

I would like to get information on taxes an active private trader has to pay in Switzerland. Also what (legal) setup can be used to keep taxes as low as possible. Use of a company in Switzerland or offshore. Trading via foreign brokers (USA, UK etc.).

Any information or lead to a really knowledgeable person or professional would be welcome. In turn I gladly disclose what I have found out so far.

Contact here or PM me.


Thanks, Felix
 
In Switzerland you pay no taxes on private capital gains. The federal tax departement has created some criterias to determine, if a gain is considered as such a profit or not.

Criterias are (most important):
- number of trades per year
- use of leverage
- use of derivatives

Summarized I can tell you, that only basic buy and hold trades fall under this definition.
Any active trader has to pay normal income taxes on his profits. Such a trader will be considered as self employed and has to pay also social insurance etc., overall the tax is about 25-30%, it depends on the Kanton (country) you live.

Sure, if you don't trade fulltime, you can try to declare these profits as private capital gains. Real fulltime traders in Switzerland are rare and the government can't check out every single trade. So if you're lucky, you will pass as a buy and hold investor.

Feel free to ask questions, I can also provide some links (although in German) with fact sheets concerning the above mentioned criterias etc.
 
Second possibility :
Before you even move there, you negociate with the cantonal tax authorities a fix-rate deal. They will want to know you have some money available (not millions, but they will want to know you can sustain yourself).
Your tax will be essentially indexed on your rent (or an estimation of your rent if you are owner), essentially they will count that your rent is 1/5th or your income (which it usually is for most people), so rent*5*12 should be your annual income, so you will be paying tax on that (depending on the canton, that could be low). If you make 10 times that amount, they will not care one little bit.

Pros :
Really low taxes, especially if you are winning big, and/or living in a modest home.
You don't even file a tax return, you just pay the fix amount you negociated.

Cons :
You are not allowed to work in switzerland (although one would think it could be difficult to prove that you are not working)
You have to live in switzerland for more than 6 month per year (although this is not a con for me at all).

Best thing I would advise, setup a quick mini Hedge fund in the Seychelles, bank account in Lichtenstein, fully anonymous, you tell the authorities you have money in a fund, and it makes you a living, you trade your account either from home (but pretending you don't work) or you trade your account from somewhere else during 5 months and 29 days, and then you enjoy 6 months skiing holidays (or summer lakeside pool).
 
Quote from Big:

Second possibility :
Before you even move there, you negociate with the cantonal tax authorities a fix-rate deal. They will want to know you have some money available (not millions, but they will want to know you can sustain yourself).
Your tax will be essentially indexed on your rent (or an estimation of your rent if you are owner), essentially they will count that your rent is 1/5th or your income (which it usually is for most people), so rent*5*12 should be your annual income, so you will be paying tax on that (depending on the canton, that could be low). If you make 10 times that amount, they will not care one little bit.

Pros :
Really low taxes, especially if you are winning big, and/or living in a modest home.
You don't even file a tax return, you just pay the fix amount you negociated.

Cons :
You are not allowed to work in switzerland (although one would think it could be difficult to prove that you are not working)
You have to live in switzerland for more than 6 month per year (although this is not a con for me at all).

Best thing I would advise, setup a quick mini Hedge fund in the Seychelles, bank account in Lichtenstein, fully anonymous, you tell the authorities you have money in a fund, and it makes you a living, you trade your account either from home (but pretending you don't work) or you trade your account from somewhere else during 5 months and 29 days, and then you enjoy 6 months skiing holidays (or summer lakeside pool).
More...


What do you mean when you say "you are not allowed to work in Switzerland"?
 
ie you are not supposed to work at all in switzerland, just live there.

Historically, this has been the regime of choice for the likes of pro tennis players, F1 race drivers, and rich people who live off off their portfolio/trust funds.

pro tennis players do not play tennis in switzerland, only in melbourne, paris, Wimbledon, australian open etc.
So in between tournaments, they go back to their house on shore of lake geneva, and have a good rest.
Same goes for F1 drivers.
Rich people have their money invested in places, funds etc, and just live off the proceeds.
 
My father lives in Valais and I live in the Alps on the french side.

I heard that for traders, best cantons were Fribourg, Zug and Valais( avoid Vaud and Geneva although they are nicer )
 
Quote from fluttrader:

Do the Seychelles have hedge fund regulation ?
More...

Don't know about that, but an awesome getaway island - mostly topless at the beaches/pools :)
 
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