Swiss taxation on shares, ETFs, cryptos & bonds explained

Yuhman 8 min read
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5 quick fixes for investors in Switzerland
 
1. Make the most of Pillar 3a
Pay in and save on tax – sounds good, right? Each year you can deduct the maximum amount for Pillar 3a from taxable income. Pay less tax and save up for retirement = win-win.
2. Capital gains are tax-free
Sell shares at a profit? Jackpot! As long as you are not a professional day trader, it’s tax-free. But too much playing the markets can attract the attention of the tax office.
3. Reclaim withholding tax on dividends
35% withholding tax on Swiss dividends? Sounds annoying, but it can be claimed back – as long as you declare it properly in your tax return.
4. Keep an eye on wealth tax
The more cash and shares you own, the bigger the piece of the pie your canton will take. Diversifying can help to ease the tax burden.
5. Optimise your ETF strategy
Accumulating ETFs (that immediately reinvest dividends) can be smarter from a tax perspective than distributing ones. Less effort, more efficiency.

Taxes for investors: the main rules in Switzerland

So you’ve just dived into the exciting world of investments and already feel like a budding finance professional when it comes to investing? But hold on a minute – when it comes to tax, there are a few rules in Switzerland that you need to know. To make sure that thinking about your tax return doesn’t bring you out in a cold sweat, we’ve got a few key tips for you, and show you what to expect tax-wise if you include shares, ETFs, cryptos and bonds in your portfolio.
Gains from the disposal of cryptocurrencies are also tax-free – as long as you hold the coins privately.

1. Taxation of shares in Switzerland

Shares are a classic form of investment – but what’s the story when it comes to tax? There are a few points to consider here, too. Here are the facts:
  • Capital gains: Gains on the disposal of shares are tax-free – as long as you are holding the shares in your personal assets and don’t play the markets like a day trader or heavy trader.
  • Dividends: Even though these lovely profit distributions go straight into your account, the taxman is watching. Dividends are classed as income and are therefore taxable. Income from dividends is subject to withholding tax, which means that 35% is deducted at source, but the good news is that you get it back if you declare it correctly on your tax return.
  • Wealth tax: Shares form part of your assets and must be declared in your tax return at market value. The value of the shares is determined as of the reporting date (31 December). Tip: Everything that you own also belongs to you for tax purposes.

Brief fact check:

✅ Capital gains from shares? Tax-free.
❌ Dividends? Taxable income.
📅 Shares are recorded for wealth tax at market value as of 31/12.

2. Taxation of ETFs in Switzerland

Exchange Traded Funds (ETFs) have revolutionised the world of financial investment, since they are simple, transparent, versatile and don’t cause a tax headache. Here are the key points at a glance:
  • Capital gains: As with bonds and shares, gains from the disposal of ETFs are tax-free – as long as they are held as personal assets.
  • Distributions: Whether these are interest or dividends, distributions from ETFs are considered income and are taxable. This applies even if they are directly reinvested – the portion of dividends and interest must nonetheless be taxed.
  • Wealth tax: ETFs are classed as assets and are reported in your tax return at market value as of 31/12.

Brief fact check:

✅ Capital gains from ETFs? Tax-free.
❌ Distributions? Taxable income – even when reinvested.
📅 ETFs are recorded for wealth tax at market value as of 31/12.

3. Taxation of cryptocurrencies in Switzerland

Cryptos? Cool, digital and in Switzerland often simpler than you think from a tax perspective. To keep you on top of things for the next tax deadline, here are the key points:
  • Capital gains: Gains from the disposal of cryptocurrencies are also tax-free – as long as you hold the coins privately. This applies to gains that are made from trading or disposing of cryptocurrencies.
  • Income from mining and staking: Not so easy – in this case it becomes taxable. If you acquire cryptocurrencies through mining or staking, you must pay tax on the value of these at the time they are received as income – they are subject to income tax.
  • Good to know: Yuh does not currently offer mining or staking – with us you can concentrate on buying and selling cryptos and their safe custody.
  • Wealth tax: Cryptos fall within the scope of wealth tax. They are listed in the Schedule of Securities and Assets under «Other assets» or «Other account» with the name of the respective cryptocurrency, again based on market value as of 31/12.
💡 Tip: A tax statement from the bank or a wallet printout as of 31/12 can be used as proof. Many exchanges/wallets have their own statements (assets/transactions/income or separate tax statements etc.). Otherwise a printout of the wallet (as of 31/1) can serve as proof, ensuring that everything is clearly evidenced.

Brief fact check:

✅ Capital gains? Tax-free.
❌ Income from mining and staking? Taxable (but not relevant at Yuh).
📅 Cryptocurrencies are recorded for wealth tax at market value as of 31/12.

4. Taxation of bonds in Switzerland

Bonds? Sound dull, but actually exciting – and there are a few points to consider from a tax perspective. Let’s summarise it all Yuh-style – short and sweet:
  • Capital gains: Gains from the disposal of bonds? Tax-free – at least as long as they are held as personal assets. Yuh offers you access to bonds through ETFs that track the bond markets. At Yuh we do not (yet) offer direct investments in individual bonds, but ETFs provide a simple and diversified means of investing in this type of product.
  • Interest: Interest that you receive during the term of your bond is taxable and must be declared in your tax return as income. In addition, this interest is subject to withholding tax, i.e. 35% is deducted from you at source as withholding tax, but no drama – you’ll get it back as long as you have declared the securities correctly.
  • Wealth tax: Bonds form part of your assets and must be shown in your wealth tax return. The reporting date for this is 31 December.

Brief fact check:

✅ Capital gains from bonds? Tax-free.
❌ Interest? Taxable income.
📅 Subject to wealth tax (reporting date 31/12).

5. When are you considered to be a professional securities trader in Switzerland?

In Switzerland capital gains on your personal assets are generally tax-free – a real advantage compared to other countries. But beware: there are limits. If the tax office no longer classifies your trading as a hobby but as a business, that means no more tax-free gains; because then you need to pay income tax and social security contributions. Here are the most important criteria that could make you a securities trader:

Hedging and debt financing

If you use leverage instruments or loans to buy securities and make profits, the tax office may deem this to be a professional occupation.

Regularity of trades

Do you buy and sell securities regularly and systematically (holding period < 6 months)? Then the tax office might want to take a closer look.

Volume of transactions

High turnover or a lot of trades in a short time (e.g. using trading bots) can be considered as professional trading. As a guideline: If the trading volume exceeds five times the initial capital, this could prove to be critical.

Financing your living expenses

Do you live off your capital gains and have no other source of income? This increases the likelihood that the tax office will classify you as trading professionally. A long-term investment strategy is distinguished here from private wealth management, where preserving and growing capital are paramount.

Financial consequences of classification as a professional trader

  • Capital gains are classed as income and are taxable.
  • Income above 2’300 CHF is subject to social security contributions (approx. 10%).
  • Upside: Losses can be recognised for tax purposes, which is not the case in private wealth management.
What else is important
Our dear friend tax – it’s a bit like an uninvited guest who keeps showing up on your doorstep once a year. The taxation of shares, ETFs, cryptocurrencies and bonds in Switzerland is in many cases beneficial for private investors, since capital gains are usually tax-free. However, earnings from dividends, e.g. on shares, and from mining cryptocurrencies are taxed as income. It is therefore all the more important for your tax return to declare all relevant information on financial investments. This includes the value of financial investments as well as your income.
 
Of course, this gets a bit admin-heavy, but we strongly recommend that you always record all transactions and carefully retain relevant documentation, so that you are able to provide evidence of the source of funds and any gains made in the event of a tax inspection – just in case. In the Yuh app you can download or request all documents at any time under «Account > Documents». You can also order an eTax statement for a fee of 25 CHF – although this lovely document is not mandatory, it makes completing your tax records so much easier. You can find more information on the eTax statement here.
 
Last but not least: If you are unsure, do consult a tax advisor. He or she will be happy to help you clarify your specific situation.