Swiss Stamp Tax Duty – All you need to know
| Updated: |(Disclosure: Some of the links below may be affiliate links)
If you have been investing in Switzerland, you probably have heard about the Swiss Stamp Tax or the Swiss Stamp Duty. This Stamp Tax is a tax your broker collects when you do certain transactions on the stock market.
Even though this stamp tax is straightforward to understand, there is a lot of confusion. Therefore, I wanted to cover the tax in detail to dispel the confusion once and for all.
When investing in the stock market, it is important to cut down the fees. If you are a Swiss investor, it is essential to know the Stamp Tax and especially understand how to avoid this tax! Because, as we will see, there is a way to avoid this tax!
I have saved quite a lot of money by not paying this tax these last few years.
Swiss Stamp Duty Tax
The Swiss Stamp Duty is a tax levied by the federal tax administration on stock market transactions. It is a tax on the transfer of securities.
As a side note, we will focus on securities on the stock market in this article. But there is a similar tax on real estate and insurance policies.
You will have to pay this tax on each purchase and sale of shares, bonds, ETFs, and other securities. Your broker will automatically deduct the stamp tax from the transaction. So, this tax is direct, and you do not have to do anything in your tax declaration with it.
How much Swiss Tamp Tax you will pay will depend on whether you are trading on a Swiss Stock Exchange or a foreign one:
- For a transaction on a Swiss Stock Exchange, you will pay 0.075% of the transaction value.
- For a transaction on a Foreign Stock Exchange, you will pay 0.15% of the transaction value.
So, you pay twice more on a foreign stock exchange than the Swiss Stock Exchange.
And do not forget that you will have to pay this tax again when you sell the securities. So for each of your shares on Swiss stock exchanges, you will pay 0.15% and 0.30% on each share from a foreign stock exchange. And the tax when you sell is likely to be higher since your shares will have (hopefully!) appreciated between the time you buy and sell.
If you only buy once to invest and sell when you need the money many years later, this tax will not weigh heavily on your fees. But if you need to rebalance your portfolio, you must pay for it. And if you need to switch to a new ETF, it could be costly.
This tax may not seem like a lot, but it is not negligible. If you want to sell 50’000 CHF of Swiss shares, you will pay 37.50 CHF in fees. And you will pay twice more if these shares are from a foreign stock exchange. This tax can quickly add up to a significant amount over the years.
If you want to look at the official information about this tax, you can read the official page on Tax on securities and insurance premiums.
Examples of Swiss Stamp Tax
To understand how much Stamp Tax you will pay, we can run a few examples:
| Operation | Share | Stamp Tax |
|---|---|---|
| Buy 1’000 CHF | Swiss share | 0.75 CHF |
| Buy 1’000 CHF | Foreign share | 1.50 CHF |
| Sell 5’000 CHF | Swiss share | 3.75 CHF |
| Sell 5’000 CHF | Foreign share | 7.50 CHF |
| Buy 20’000 CHF | Swiss share | 15 CHF |
| Buy 20’000 CHF | Foreign share | 30 CHF |
These fees are not large numbers. But they still add up, month after month, if you are investing regularly.
We can imagine a scenario where you invest 5000 CHF every month. 1000 CHF goes to Swiss shares, and 4000 to foreign shares. Here is what you will pay:
- 6.75 CHF per month
- 81 CHF per year
- 810 CHF after ten years
It does not seem like much per month, but you have wasted nearly 1000 CHF after ten years. If we can, it is better to avoid paying these kinds of taxes.
And do not forget that you will need to pay the tax again when you sell the shares. If you need to sell shares for one million CHF during your retirement, you must pay between 750 CHF and 1500 CHF. And this will go even higher if you have a more substantial portfolio.
So, we should see if we can avoid the Swiss Stamp Tax!
How to avoid the Swiss Stamp Duty Tax?
Fortunately, we can avoid this tax entirely by using a non-Swiss broker.
Indeed, the government only levies this tax when security dealers are involved in the transactions. And since 2010, Swiss law does not consider foreign brokers as securities dealers.
This difference effectively means that by using a foreign (non-Swiss) broker like Interactive Brokers, you will save up to 0.15% on each transaction!
In my opinion, this law is quite stupid. I understand the need for the government to levy taxes. But this does a massive disservice to Swiss brokers. They are already expensive, but they are even less interesting to consider as a good broker with this law. This tax efficiency is one of the reasons why the Best Brokers in Switzerland are foreign brokers.
If it made sense, I would prefer using a Swiss broker. But mathematically, it simply does not make sense.
Use Contracts for Difference
Just for completeness, I want to mention the other way to avoid the Swiss Stamp Tax: Using Contracts for Difference (CFDs). Indeed, the Swiss Stamp Tax is not levied on CFD trading.
Now, I strongly advise against trading with CFDs. They are among the riskiest of investing instruments. CFDs are the investing instrument where people are losing the most money. In practice, more than 75% of people using CFDs are losing money!
CFDs are a form of derivatives with which you can bet on the future development of underlying assets such as stocks. They can have a lot of margin (leverage) and are loosely regulated since they are not traded directly on stock exchanges but over the counter.
Again, I just wanted to mention CFDs for completeness, not to encourage you to use them. I have never traded with CFDs, and I never intend to. Simple passive investors do not need such complicated instruments to invest successfully.
Conclusion
You should now know everything you need to know about the Swiss Stamp Tax (or Swiss Stamp Duty). It is simple to understand this tax. But it is essential to understand it since you will likely have to pay for many years if you invest in the stock market.
If you are using a Swiss broker, there is little you can do about this tax.
On the other hand, foreign (non-Swiss) brokers are exempted from this tax. This exemption means that you can save money on your transactions by using a foreign broker like DEGIRO or Interactive Brokers. And since these brokers have other advantages, it is difficult for Swiss brokers to compete.
Capital gains taxes in Switzerland is something else that many people do not understand. Find out all about capital gains and taxes in Switzerland.
Did I forget anything about the Swiss Stamp Tax?
Download this e-book and optimize your finances and save money by using the best financial services available in Switzerland!
Download The FREE e-book
Thanks for the post,
I have a question, if my income comes only from trading on line, am I considered a professional investor? And does a professional investor have to pay stamp duty?
Thanks for the replay
Hi Max,
I would say yes and yes. But I am not an expert at active trading.
Hi,
Thank you for this very infomative post!
About the possibility to avoid taxes by using an offshore broker:
As you already said, a system like this is quite strange because it not only gives a loophole to traders and investers that costs the country money (in way of less tax income), but also a serious disadvantage for Swiss brokers.
This makes me wonder about the reasoning from the government about this. Is there an official statement/webpage where they recognize this loophole and accept it? Or any legal cases where the government (succesfully/unsuccesfully) tried to claim the tax anyway?
Thank you for answering :)
Hi,
I think it’s a very old tax. It was made at a time when people did not really trade with other securities dealers abroad.
But I don’t know exactly why it’s written that way.
It’s really not a loophole, but an official part of the law. It explicitly exempts from this tax foreign securities dealers. They cannot claim the tax from foreign dealers, that would not be legal per this law.
You can read read the law to see that it is official: https://www.fedlex.admin.ch/eli/cc/1974/11_11_11/fr#art_14
Many thanks for your posts, they provide invaluable information.
I have a doubt: if I use Interactive Brokers to buy shares, and then I transfer these shares from IB to Swissquote, will this transfer be subjected as well to the Stamp Tax?
Thanks again!
Hi RJ,
Normally, a transfer should not be subject to the stamp tax, no.
Thanks again.
I did just that – no tax.
Investart creates an account on interactive broker. Does that mean they’re exonerated from this tax too?
Hi Elisabetta,
Yes, that is correct!
Hi,
Just to be clear are you saying that Degiro.ch (signed up on the Swiss version so that it accepts CHF transfers from CH IBAN to CH IBAN), is not subject to Swiss stamp duty. Or is it?
Hi Kvothe,
Yes, that’s correct. The Swiss Stamp Tax Duty will only apply to Swiss brokers. Therefore, it should not apply to DEGIRO.
Hello, thank you so much for your blog!
I’m very new to this and this may seem a dumb question but does this means if one invests with a robocalls-advisor like truewealth or selma, that one will pay these taxes? and this is automatically done by the robo-advisor?
thank you so much,
Rita
Hi Rita,
There are no dumb questions ;)
Yes, this fee also applies to Robo-advisors. In that case, the robot-advisor itself will have to pay it. And they will bill you for it.
In the case of Selma, this fee is already included in the all-inclusive fee. For True Wealth, this is added on top of their management fees.
Thanks for stopping by!
Please correct this :-) :
For a transaction on a Swiss Stock Exchange, you will pay 0.075% of the transaction value.
For a transaction on a Swiss Stock Exchange, you will pay 0.15% of the transaction value.
Hi Johannes,
This is done, but the cache made the error stay longer than I wanted. Sorry about that!
Thanks for letting me know.
Hello, please can you confirm that another way of not paying the Swiss stamp duty is to buy “des fonds indiciels” instead of ETFs?
Any thoughts on the advantages of ones over the others?
I know not all brokers offer them but I was looking at VZ and they have both and their overall fees seem reasonable, unless I’m missing some since one has to pay attention to so many… Thanks in advance.
Hi Ozana,
That’s not entirely correct. Swiss mutual funds are indeed exempt from swiss stamp tax, but not foreign funds. So, if you find a good Swiss mutual fund, you could indeed save on the swiss stamp tax.
There are not many good Swiss funds, most of them are really expensive. If you find a great Swiss mutual fund, please share it with us, and as you said, be careful with all the fees. And be careful about the possible fees of buying the funds with VZ as well.
Thanks for the post! You really put in useful and practical post that day to day swiss investor needs to know. Keep up the good work!
ps. How about making an article about how to claim witholding tax if one invest in US based ETF such as VT?
Hi LearningFI,
Thanks for the kind words.
You are right, I should talk about this more in detail or at least include it in one article.
Thanks for stopping by!
Hello! There could be a typo in the beginning of the article in regards to the rate at different stock exchages:
For a transaction on a Swiss Stock Exchange, you will pay 0.075% of the transaction value.
For a transaction on a Swiss Stock Exchange, you will pay 0.15% of the transaction value.
Just to let you know.
Thank you very much Anne! This is fixed :)
Hi there,
thanks a lot for your articles.
I enjoy reading them a lot and they are helping me on my journing to become FI.
There is a little mistake in the article. After “How much you will pay will depend on whether you are trading on a Swiss Stock Exchange or a foreign one”, you wrote for both bullet point: Swiss Stock Exchange. One of them should be foreign.
Hi Michel,
Thanks for your kind words!
And thank you very much for letting me know about this error, it should be fixed now!