Share portfolio transferred from Germany to Switzerland
Are you planning to emigrate to Switzerland and would like to transfer your ETF and share portfolio from Germany to Switzerland? With the right steps, you can easily transfer your portfolio, overcome tax hurdles and keep your finances under control even after the move.
Your share portfolio in Germany
Moving to Switzerland involves a number of important tax and organisational aspects for investors that should be clarified at an early stage. If you have an equity or ETF portfolio, the following points are crucial:
Capital gains tax in Germany
In Germany, capital gains such as dividends and realised capital gains are subject to 25 % withholding tax, plus solidarity surcharge and church tax, if applicable. This tax liability applies as long as you are resident in Germany for tax purposes. To avoid excessive tax charges, you should plan the timing of your departure and the notification to the German tax authorities carefully.
Emigrating to Switzerland - New tax residence in Switzerland
When you change your place of residence to Switzerland, the German tax liability on future investment income no longer applies. The decisive factor is the exact date from which you are resident in Switzerland for tax purposes. Timely and correct communication with the tax authorities in both countries is essential to avoid complications.
Double taxation agreements (DTA)
The double taxation agreement (DTA) between Germany and Switzerland regulates which country may tax which income. Dividends are often subject to a reduced tax rate in Germany (source country), while Switzerland levies the remaining tax. It is important to understand these regulations in order to avoid the risk of double taxation.
Portfolio transfer to Switzerland
Switching your custody account to a Swiss broker can bring tax and administrative advantages. However, please note that transaction costs will be incurred and tax consequences, especially in the case of unrealised gains, should be carefully examined. Expert advice is recommended here to avoid potential pitfalls. Emigration Switzerland is not a complicated step with our support, sign up for a free consultation.
Capital gains tax in Switzerland
In Switzerland, there is no capital gains tax on private sales of securities. Dividends and interest, on the other hand, are considered taxable income and are assessed at the progressive income tax rate. This difference to German taxation can have a significant impact on your investment decisions.
Note: This overview is intended as a general guide. For individual planning, you should always seek expert tax and legal advice in order to optimally consider all aspects of your move and portfolio transfer.
The exit tax
What is the exit tax?
The exit tax is a tax that is levied in Germany when someone with capital investments moves abroad, e.g. to Switzerland. It applies to private individuals, self-employed persons and owners of limited liability companies who move away from Germany and want to keep unrealised gains (hidden reserves) on their shares, funds or investments abroad without paying tax on them. The idea behind this is that Germany wants to tax these capital gains, even if the move takes place before these gains are realised through a sale or disposal.
When is the exit tax due?
The tax is due if you move your tax residence from Germany to Switzerland and take shareholdings in companies or stocks with you. The exit tax then applies because Germany loses its right of taxation. However, the tax liability does not simply cease as a result of the move. The tax liability only ends if the assets have already been taxed in Germany or if there are no hidden reserves.
Who is specifically affected?
As a rule, this affects persons with capital investments and shareholdings in companies. The rule applies from an investment of at least 1% in a corporation within the last five years. This applies to private individuals as well as self-employed persons and owners of limited companies. If, for example, you hold more than 1% of shares in a limited company that you would like to keep after moving to Switzerland, the exit tax will be due on the increase in value up to that point.
How is the exit tax calculated?
The tax is calculated on the total increase in value of the shares up to the day you move to Switzerland, even if you do not sell your shares. This is referred to as a "fictitious sale". The German tax authorities therefore treat the move for tax purposes as if the shares had been sold.
Are there options for deferral or tax relief?
It is generally possible to defer exit tax if you move to an EU or EEA country and submit a declaration of residence there. However, this exception does not apply to Switzerland. As Switzerland is not a member of the EU or EEA, the exit tax is due immediately and in full, without the possibility of deferral. In some cases, it may be helpful to seek tax advice before moving in order to take advantage of any tax allowances or to choose a tax structure that is more favourable for you.
7 tips for emigrating to Switzerland - How to do it right!
- Depot transfer: Usually free of charge, but not always. Check!
- Taxes: In Germany withholding tax, in Switzerland wealth tax.
- Exchange rates: Convert euros into francs? Note the costs.
- Tax certificate: Save important documents for your tax return.
- Mandatory reporting: Declare investment income correctly in both countries.
- Deadlines: Transfer can take a while - plan in good time.
- Deposit structure: Direct transfer or sale and new purchase? Consider the tax consequences.
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