Germany–Switzerland
Topic 03Investments & Withholding Taxes Between Germany and Switzerland
Swiss shares, funds, ETFs, investment accounts and interest income generally need to be assessed under German tax law when you live in Germany. Switzerland may also levy withholding tax on certain income. The key factors are the type of income, its classification under German tax law, treaty relief, refunds and correct reporting in Germany.
Overview
How Are Swiss Investments Taxed for German Residents?
German tax residents generally need to include investment income from Swiss bank accounts, investment accounts and securities in their German tax assessment.
The first step is to distinguish between investment types. Direct shareholdings, funds and ETFs, interest-bearing investments and business shareholdings are subject to different German tax rules.
The next step is to determine whether Swiss withholding tax or another tax at source has been deducted, how much Switzerland may retain under the tax treaty, and which amount may need to be reclaimed.
This Topic from the Swiss Perspective
TaxRep Switzerland covers German investments held by Swiss residents, German withholding tax, and Swiss income and wealth tax.
Approach
Four Stages of the Assessment
Swiss bank records should be reviewed before their figures are used in a German tax return. Swiss withholding tax, treaty relief and German taxation require separate assessment.
Identify the Income Type
Dividend, interest, fund income, deemed advance income from funds (Vorabpauschale), or a capital gain?
Review Swiss Tax
Which Swiss withholding tax or other tax at source has actually been deducted?
Apply Treaty Relief
How much tax may Switzerland retain, and which amount can be reclaimed?
Determine German Tax Treatment
Establish the German tax base, applicable rate, partial exemption and foreign tax credit.
Swiss Withholding Tax Is Not Automatically Fully Creditable in Germany.
To the extent that Switzerland is not entitled to retain the tax under the double taxation treaty, the excess generally needs to be reclaimed through the Swiss refund procedure.
Switzerland as the Source Country
Swiss Withholding Tax and Treaty Relief
Particularly for Swiss dividends, it is necessary to distinguish between the actual Swiss tax deduction, the tax Switzerland may retain under the treaty, and the refundable amount.
Swiss Dividends
Switzerland generally levies withholding tax. For a German investor, the treaty limits the tax Switzerland is entitled to retain.
Refunds
Tax deducted above the treaty rate generally needs to be reclaimed through the Swiss refund procedure.
German Foreign Tax Credit
Only foreign tax that is creditable under the applicable rules can reduce the German tax liability.
Interest
Interest is governed by different treaty provisions from dividends and therefore requires a separate assessment.
Funds and ETFs
Investment funds are also subject to the German Investment Tax Act, including the Vorabpauschale and partial exemption rules.
Business Shareholdings
For significant shareholdings or interests connected with business activities, section 17 of the German Income Tax Act, the partial-income method and company-related issues may also be relevant.
Typical Questions
Swiss Investments in the German Tax Return
Do I Need to Report a Swiss Investment Account in Germany?
The German tax return primarily concerns taxable income and transactions arising from the account, rather than the account balance itself.
What If There Is No German Tax Certificate?
Swiss banks generally do not issue a German tax certificate. Their records therefore need to be prepared for German tax purposes.
How Are Swiss Shares Taxed?
Dividends, withholding tax and subsequent share sales need to be assessed under German law.
How Are Swiss Funds and ETFs Treated?
The German Investment Tax Act governs their treatment, including the Vorabpauschale, partial exemptions and special rules for sales.
What About Interest from Swiss Accounts?
Interest from Swiss bank accounts, fixed-term deposits and bonds generally needs to be included in the German tax assessment.
What Happens After Moving from Switzerland to Germany?
Existing investments need to be accounted for under German tax law from the start of German tax liability.
What Needs to Be Considered When Selling?
Acquisition costs, foreign currency amounts, investment tax rules and, where relevant, ownership percentages need to be considered.
Which Documents Are Required?
Annual statements, purchase and sale confirmations, dividend records, fund documentation and evidence of Swiss tax deductions.
Situations
Typical Cross-Border Investment Situations
These situation pages bring together the individual tax questions relevant to each practical cross-border scenario.
Swiss Shares Held by a German Resident
Direct investments in Swiss shares: dividends, withholding tax, share sales and custody in Switzerland.
Explore situationSwiss Investment Account Held by a German Resident
Foreign bank records, dividends, interest, sales, funds and the German tax return.
Explore situationSwiss Funds and ETFs Held by a German Resident
German investment tax law, the Vorabpauschale, partial exemptions, sales and custody in Switzerland.
Explore situationSwiss Investments After Moving to Germany
Keeping existing Swiss investment accounts, shares, funds and interest-bearing investments, and the start of German taxation.
Explore situationDo You Hold a Business Interest in a Swiss AG?
Significant shareholdings or interests involving section 17 of the German Income Tax Act, management, board membership or shareholder loans are covered primarily in Businesses & Shareholdings.
Tax Articles
Specific Tax Questions About Swiss Investments
These articles address specific tax questions and provide further detail alongside the broader situation pages.
Swiss Dividends for German Residents
35% Swiss withholding tax, tax retained under the treaty, German taxation and foreign tax credits.
Read articleReclaiming Swiss Withholding Tax from Germany
The maximum treaty rate, eF85, the refundable amount, deadlines and coordination with German taxation.
Read articleSelling Swiss Shares as a German Resident
Article 13 of the treaty, section 20 of the German Income Tax Act, acquisition costs, CHF conversion and loss offsetting.
Read articleSwiss Interest Income for German Residents
Swiss bank accounts, fixed-term deposits, bonds, allocation under the treaty and German taxation.
Read articleThe Vorabpauschale for ETFs in a Swiss Investment Account
The base interest rate, base return, distributions, partial exemption and the year of acquisition.
Read articlePartial Exemptions for Swiss Funds and ETFs
Equity funds, mixed funds, real estate funds, investment ratios and supporting documentation.
Read articleSelling Funds and ETFs Held in a Swiss Investment Account
Capital gains, previously assessed Vorabpauschalen, partial exemptions, CHF conversion and legacy holdings.
Read articleTransferring Fund Holdings from Switzerland to Germany
Acquisition records, Vorabpauschalen, legacy holdings, the substitute tax base and tax history.
Read articleSwiss Funds and ETFs After Moving to Germany
Historical acquisition costs, the Vorabpauschale, partial exemptions, legacy holdings and subsequent sales.
Read articleSwiss AG Dividends Received by a German Shareholder
Ownership percentage, withholding tax, the tax treaty and special considerations for business shareholdings.
Read articlePortfolio Investments and Business Shareholdings
This section covers private investment accounts and portfolio investments. Business shareholdings and management-related questions are explored in greater detail under Businesses & Shareholdings.
- Portfolio shares → Investments
- Swiss investment accounts → Investments
- Funds and ETFs → Investments
- Interest income → Investment tax articles
- Significant AG shareholdings → Businesses & Shareholdings
- Management and board membership → Businesses & Shareholdings
Related Topics
Further Topics Relevant to Cross-Border Investments
Residence & Relocation
Changes of residence, moving into or out of Germany, and treaty residence.
Explore topicBusinesses & Shareholdings
Swiss companies, significant shareholdings, management and shareholder matters.
Explore topicInheritance & Gifts
Transfers of investment accounts, shares, funds and business interests.
Explore topicTax Returns & Procedures
Foreign income, filing obligations and cross-border tax procedures.
Explore topicGermany–Switzerland Tax Advice
Do You Hold Swiss Investments While Living in Germany?
We assist with Swiss investment accounts, shares, dividends, interest, funds and ETFs, reclaiming Swiss withholding tax and correct reporting in the German tax return.
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