verkauf-schweizer-aktien-deutscher-wohnsitz

Germany–Switzerland · Share Sales

Treaty Article 13 · § 20 EStG · § 17 EStG

Selling Swiss Shares as a German Resident

When an individual who is tax resident in Germany sells Swiss shares held as private assets, the Germany–Switzerland double tax treaty generally assigns the right to tax an ordinary portfolio disposal exclusively to Germany. The next question is whether the gain is treated as private investment income under section 20 of the German Income Tax Act (EStG) or falls under section 17 EStG because the seller held an interest of at least 1% at some point during the preceding five years.

Starting Point

The Swiss company’s registered office does not automatically determine where the capital gain is taxed

When privately held shares are sold, it is necessary to distinguish between the company’s country and the shareholder’s country of residence.

Holding shares in a Swiss company does not, by itself, mean that a subsequent capital gain is taxable in Switzerland merely because the company is based there.

If the seller is resident in Germany for treaty purposes at the time of the disposal, Article 13 of the treaty generally allocates the ordinary share disposal gain to Germany.

Article 13 of the Germany–Switzerland Tax Treaty

Ordinary share sales: generally taxable exclusively in Germany

Article 13(3) of the Germany–Switzerland tax treaty generally assigns gains from the disposal of property not covered by the special provisions of paragraphs 1 and 2 to the seller’s country of residence.

For an individual resident in Germany for treaty purposes who sells ordinary Swiss portfolio shares, this generally means that Germany has the right to tax.

  • Swiss shares
  • Private portfolio assets
  • Seller resident in Germany for treaty purposes
  • Not assets of a permanent establishment
  • No special circumstances involving a change of residence
  • Taxing rights generally allocated to Germany

Dividends and share disposals are governed by different treaty articles

For dividends, Switzerland as the source country may generally retain a limited amount of withholding tax. Ordinary gains from selling Swiss shares, however, are generally taxable exclusively in Germany as the country of residence.

Portfolio Shares

Disposals of holdings below 1% generally fall under section 20 EStG

Gains from selling shares generally constitute investment income under section 20(2), sentence 1, no. 1 EStG.

Ordinary private portfolio investments are generally subject to the special 25% tax rate under section 32d(1) EStG, plus solidarity surcharge and church tax where applicable.

§20

Investment income

Ordinary sales of privately held shares are generally covered by section 20 EStG.

25%

Separate tax rate

Taxable investment income is generally subject to the 25% rate.

KAP

Swiss securities account

If no German tax is withheld, the capital gain generally needs to be reported in the tax return.

Calculating the Gain

Sale proceeds minus acquisition costs and direct disposal costs

The tax calculation is not based solely on the amount paid out by the broker or the original gain in CHF.

What matters is the capital gain calculated under German tax law.

Simplified basic formula

Sale proceeds − acquisition costs − direct disposal costs = capital gain for tax purposes

  • Purchase confirmation
  • Sale confirmation
  • Number of shares
  • Incidental acquisition costs
  • Disposal costs
  • Corporate actions
  • Currency conversion

Corporate actions can change the acquisition costs

Stock splits, subscription rights, spin-offs, mergers, share exchanges and bonus share allocations may trigger special German rules for determining acquisition costs.

Swiss Francs

A gain in CHF is not automatically the taxable gain in euros

German income tax is calculated in euros. If Swiss shares are purchased in CHF and subsequently sold in CHF, the relevant amounts must therefore be determined in euros for tax purposes.

Movements in the CHF/EUR exchange rate can consequently affect the capital gain taxable in Germany.

Simplified Example

A small share price increase in CHF can still produce a larger gain in EUR

An investor purchases Swiss shares when the Swiss franc is weaker against the euro. The shares are later sold when the CHF is stronger.

Even if the share price has increased only slightly in CHF, the German capital gain calculated in euros may be significantly higher.

Do not simply copy the CHF gain from the Swiss tax report

A Swiss bank statement may follow Swiss calculation methods or show amounts exclusively in CHF. For the German tax return, the relevant figures must be prepared in accordance with German rules.

Share Disposal Losses

Losses from share disposals are subject to a separate German loss offset regime

Under section 20(6) EStG, losses from selling shares can generally only be offset against gains from selling shares.

Swiss securities accounts generally do not automatically maintain loss offset records under German tax rules. Gains and losses therefore need to be prepared appropriately for the German tax return.

+

Share disposal gain

Can generally be offset against share disposal losses recognised for tax purposes.

−

Share disposal loss

Generally falls within the separate loss offset category for share disposals.

CH

Swiss bank

A Swiss loss report does not automatically replace the calculation required for German tax purposes.

Substantial Shareholdings

Section 17 EStG may apply if a holding reached 1% during the preceding five years

Section 17 EStG must be considered if the seller held, directly or indirectly, at least 1% of the Swiss company’s share capital at any time during the preceding five years.

The sale is then no longer treated as an ordinary portfolio disposal under section 20 EStG.

Feature Portfolio shares Section 17 EStG
Ownership interest Typically below 1% At least 1% at some point during the preceding five years
Income category Investment income Business income by statutory classification
Principal provision Section 20 EStG Section 17 EStG
Tax treatment Generally the 25% rate Generally the partial-income method (Teileinkünfteverfahren)
Costs Subject to the special rules for investment income Generally deductible only proportionately under the partial-income method

The threshold under section 17 EStG is already 1%, not 25%

Ownership thresholds in tax treaties, dividend provisions or other rules must not be applied to section 17 EStG. For section 17 EStG, it is sufficient that a direct or indirect holding of at least 1% existed at some point during the preceding five years.

The Tax Treaty and Larger Shareholdings

The German 1% threshold and treaty Article 13 address different questions

Section 17 EStG determines how Germany taxes a gain under its domestic law.

Article 13 of the treaty determines which country is entitled to tax the capital gain internationally.

Even where the holding is at least 1%, the treaty allocation of taxing rights must therefore also be examined.

Pay particular attention to changes of residence

The treaty contains special rules for shares where an individual has moved their treaty residence between Germany and Switzerland and the former country taxes the appreciation accrued up to the change of residence under its domestic law.

Moving from Switzerland → Germany

Moving to Germany does not automatically reset acquisition costs to the market value on arrival

Particular care is required if the Swiss shares were acquired before moving to Germany.

A German taxpayer cannot therefore simply use the market value on the date of arrival as a new acquisition cost when subsequently selling the shares.

Historical acquisition costs, previous corporate actions and any tax treatment in the country of departure must be reviewed.

Example

Purchase while living in Switzerland, followed by a sale after moving to Germany

An investor purchases shares in a Swiss company while resident in Switzerland. Years later, the investor moves to Germany and subsequently sells the shares.

The German capital gain is not automatically limited to the appreciation arising after the move. The acquisition costs recognised under German law and the treaty’s special provisions must be determined.

Older Shareholdings

For shares acquired long ago, the acquisition date can be decisive

The current taxation of share disposals under section 20 EStG does not apply without restriction to all historical acquisitions.

Transitional provisions may be relevant for shares acquired before the introduction of the current German flat-rate investment income tax rules.

Do not automatically apply today’s standard rules to shares acquired before 2009

Historical acquisition dates should be reviewed separately before older holdings are sold. This is particularly important if the securities have since been transferred from Switzerland to Germany or between different banks.

Example

Swiss portfolio shares held privately by a German resident

Simplified Case

Sale while resident in Germany

An investor is tax resident in Germany and holds less than 1% of a listed Swiss corporation (AG).

The shares were acquired after 2008 and are held in a Swiss securities account.

Acquisition costs amount to EUR 80,000 after conversion under German rules. Net sale proceeds after directly attributable disposal costs amount to EUR 110,000.

Item Amount / Treatment
Sale proceeds after direct disposal costs EUR 110,000
Acquisition costs EUR 80,000
Capital gain EUR 30,000
Taxing rights under the treaty Generally Germany
German income category Section 20 EStG

No Swiss withholding tax on an ordinary share sale

The 35% Swiss withholding tax relevant to Swiss dividends is not a general tax on private capital gains. Dividends and share disposals must be treated separately for tax purposes.

Swiss Securities Accounts

With a Swiss custodian bank, the gain for German tax purposes often needs to be calculated separately

A Swiss bank does not necessarily calculate a share disposal gain under German tax rules.

Acquisition costs, corporate actions, foreign currency conversion and loss offsets are particularly relevant.

Buy

Purchase records

Historical purchase prices and incidental acquisition costs.

Sell

Sale records

Sale proceeds, fees and value date.

FX

Currency

Determine CHF amounts in euros for German tax purposes.

CA

Corporate actions

Review splits, spin-offs, subscription rights and exchanges.

Review Process

Germany–Switzerland share disposals in eight steps

01

Residence

Determine treaty residence at the time of sale.

02

Asset classification

Distinguish private assets from business assets.

03

Ownership percentage

Review current and historical shareholdings.

04

Acquisition date

Check older holdings, relocation and transitional rules.

05

Acquisition costs

Compile purchase prices and account for corporate actions.

06

EUR amounts

Convert relevant CHF amounts correctly for tax purposes.

07

Losses

Review the share loss offset balance and existing loss carryforwards.

08

Reporting

Report the gain in the German tax return.

Common Mistakes

Where Swiss share disposals are frequently treated incorrectly

01

Swiss company = Swiss tax

The company’s registered office is confused with the right to tax the disposal gain.

02

Copying the CHF gain

The Swiss broker’s gain is used without a German calculation in euros.

03

Overlooking section 17

A holding of at least 1% is treated as an ordinary portfolio disposal.

04

Checking only the current holding

The shareholding history over the preceding five years is ignored.

05

Using the value on arrival

The market value on moving to Germany is used as acquisition cost without a legal basis.

06

Forgetting corporate actions

Splits, exchanges or spin-offs change the tax history of the shares.

07

Incorrect loss offsets

Share disposal losses are offset against unrelated types of income.

08

Ignoring older holdings

Shares acquired before 2009 are automatically treated under today’s standard rules.

Frequently Asked Questions

Selling Swiss shares as a German resident

Where is the gain from selling Swiss shares taxed?
For an ordinary disposal of privately held shares by a person resident in Germany for treaty purposes, Article 13(3) of the treaty generally assigns taxing rights to Germany.
Do I have to pay Swiss tax on the share sale?
For an ordinary portfolio disposal by an individual resident in Germany, Article 13(3) of the treaty generally gives Switzerland no right to tax the capital gain. Special cases require a separate review.
How is the gain calculated in Germany?
In simplified terms, the gain equals the sale proceeds less acquisition costs and costs directly related to the disposal.
What tax applies to ordinary portfolio shares?
The gain generally constitutes investment income under section 20 EStG and is generally subject to the special 25% rate under section 32d(1) EStG.
When does section 17 EStG apply?
Section 17 EStG is generally relevant if the seller held, directly or indirectly, at least 1% of the company’s share capital at any time during the preceding five years.
Does the 1% threshold also apply to a Swiss AG?
Yes. Section 17 EStG generally also covers shares in foreign corporations, provided the statutory conditions are met.
Do I calculate the gain in CHF or EUR?
For German income tax purposes, the relevant amounts must be determined in euros. Exchange rate movements between purchase and sale can therefore affect the taxable gain.
Can I offset losses from Swiss shares?
Losses from private share disposals can generally only be offset against gains from share disposals.
What if I hold the shares in a Swiss securities account?
A Swiss custodian bank generally does not deduct German investment income tax from the gain. The capital gain must therefore generally be calculated as part of the German tax assessment.
Do I automatically receive a new tax basis when moving from Switzerland to Germany?
No. The market value on the date of arrival is not automatically the German tax basis. Historical acquisition costs, previous taxation and the treaty’s special rules on changes of residence must be reviewed.
What about shares purchased before 2009?
Transitional rules may apply to older shareholdings. The exact acquisition date and subsequent corporate actions should therefore be reviewed separately.
Is 35% Swiss withholding tax charged on a share sale?
No. The 35% Swiss withholding tax is particularly relevant to dividends. It is not a general withholding tax on ordinary private sales of Swiss shares.

Germany–Switzerland Tax Advice

Planning to sell Swiss shares while living in Germany?

We review taxing rights under the Germany–Switzerland tax treaty, sections 20 and 17 EStG, acquisition costs, CHF/EUR conversion, older holdings, relocation circumstances, loss offsets and German tax reporting.

Request a Share Sale Tax Review