Situation
Funds · ETFs · Investment fund taxationSwiss funds and ETFs while living in Germany
If you are tax resident in Germany and hold funds or ETFs through a Swiss securities account, these investments must be assessed under German investment fund tax law. Key issues include fund classification, distributions, the advance lump-sum investment income amount (Vorabpauschale), partial tax exemptions and disposal gains. Swiss tax reports and bank statements provide important data, but do not replace the German tax calculation.
Overview
German taxation depends on the fund’s tax classification, not the account location
If you are tax resident in Germany, funds and ETFs held in a Swiss securities account are also taxed under the German Investment Tax Act (InvStG).
The fact that the custodian bank is located in Switzerland neither makes a fund Swiss nor means that only Swiss tax law applies.
What matters is the specific investment, its classification for tax purposes and the investment income arising at investor level.
The reverse situation: German funds while living in Switzerland
TaxRep Switzerland covers funds and ETFs held by Swiss residents, including Swiss taxable income, tax values, accumulated income and wealth tax.
German investment fund tax law
Fund taxation consists of several separate components
For German tax purposes, the total income shown in a Swiss tax report cannot simply be copied across.
Distributions, Vorabpauschale amounts and gains from the disposal of fund units must be assessed separately under the German Investment Tax Act.
- Distributions
- Vorabpauschale amounts
- Disposal gains
- Partial tax exemptions
- Vorabpauschale amounts already taxed
- Foreign withholding taxes
- German tax reporting
Fund classification
The fund’s tax classification determines key aspects of German taxation
Before calculating the tax treatment of a distribution, a Vorabpauschale or a sale, it is necessary to establish how the investment is classified under the German Investment Tax Act.
Investment fund?
Check whether the investment falls within the German Investment Tax Act at all.
Equity fund?
The equity allocation may be decisive for a partial tax exemption.
Mixed fund?
Mixed funds may qualify for a different partial tax exemption from equity funds.
Another fund type?
Real estate funds and other fund structures may be subject to their own rules.
“ETF” is not a separate German tax category
The term ETF primarily describes an exchange-traded fund structure. For the German partial tax exemption, the relevant factors are the fund’s tax classification and, in particular, its investment policy.
Ongoing taxation
Distributing and accumulating funds are treated differently
Distributing fund
Actual distributions constitute investment income and are assessed under the German investment fund tax rules.
Accumulating fund
Even without a distribution, a Vorabpauschale may arise as taxable investment income.
Partial tax exemption
Depending on the fund’s classification, part of certain investment income may be exempt from tax.
Subsequent sale
On a sale, particular attention must be paid to acquisition costs and Vorabpauschale amounts already taken into account.
Distributions are only one part of fund taxation
Unlike a directly held Swiss share, a fund cannot be assessed adequately by looking only at individual distributions. The Vorabpauschale, partial tax exemption and subsequent sale all form part of the same investment fund tax framework.
Swiss custodian bank
The Swiss bank supplies data, but not necessarily the German tax calculation
Swiss bank documents provide an important basis for the German tax return.
However, the income, tax values or gains shown are generally calculated under Swiss rules. They therefore cannot be copied into the German return without being reviewed.
Distributions
Document the gross amount, payment date and tax deductions for each fund holding.
Transaction history
Retain records of purchases, sales and securities account transfers for the German tax history.
Fund information
The ISIN, share class, fund domicile and investment policy must be identifiable.
Currency
Amounts in CHF and other foreign currencies must be converted into euros for German tax purposes.
A Swiss tax value is not a German tax value
Swiss tax values and Swiss taxable income figures primarily serve Swiss reporting purposes. Germany applies its own investment fund tax rules.
Common questions
Common issues for funds and ETFs held in a Swiss securities account
Do I have to pay German tax on funds held in a Swiss securities account?
Yes. If you are tax resident in Germany, investment income from a Swiss securities account is generally also subject to German taxation.
What applies to accumulating ETFs?
In addition to a subsequent sale, the German Vorabpauschale may be particularly relevant.
What applies to distributing funds?
Distributions are assessed as investment income under German investment fund tax law.
When does a partial tax exemption apply?
This depends in particular on the fund’s tax classification and the statutory asset allocation requirements.
Is every ETF automatically an equity fund?
No. The ETF structure alone does not determine the fund’s German tax classification.
What about ETFs domiciled in Ireland or Luxembourg?
The fund’s domicile must be distinguished from the location of the Swiss custodian bank.
How is a fund sale treated?
The disposal gain, acquisition costs, Vorabpauschale amounts and partial tax exemption must be considered together.
What happens when I transfer my securities account to Germany?
Historical acquisition data and the existing tax history should be preserved in full.
What applies after moving from Switzerland to Germany?
From the start of German tax liability, fund holdings that you retain must be treated under German investment fund tax law.
Can I simply use the figures from the Swiss tax report?
Generally not. The report is an important source of data, but must be reviewed and, where necessary, reworked for German tax purposes.
Checklist
Documents for Swiss funds and ETFs held by German residents
Fund identification
ISIN, fund name, share class, currency and fund domicile.
Account holdings
Number of units, annual holdings, purchases and sales.
Distributions
Gross distributions, payment dates and taxes withheld.
Acquisition costs
Historical purchase confirmations, cost basis records and securities account transfers.
Fund information
Factsheets, investment terms, equity allocation and fund category.
Tax reports
Swiss annual tax report, income statement and individual transaction statements.
Further reading
Five in-depth articles on Swiss funds and ETFs
These articles address distinct tax issues: the Vorabpauschale, partial tax exemptions, disposals, securities account transfers and moving to Germany.
Vorabpauschale for ETFs in a Swiss securities account
Base interest rate, base return, distributions, partial tax exemptions and German taxation of accumulating fund holdings.
Read the articlePartial tax exemptions for Swiss funds and ETFs
Equity funds, mixed funds, real estate funds, asset allocation requirements and supporting evidence for German taxation.
Read the articleGerman taxation of fund and ETF sales from a Swiss securities account
Acquisition costs, disposal gains, Vorabpauschale amounts, partial tax exemptions and foreign currency data.
Read the articleTransferring a fund portfolio from Switzerland to Germany
Preserving historical acquisition costs, transfer records, bank information and tax history.
Read the articleSwiss funds and ETFs after moving to Germany
The start of German tax liability, historical acquisition costs, the Vorabpauschale and future investment fund taxation.
Read the articleRelated topics
Further topics on Swiss investments
Investments & withholding taxes
Shares, interest, funds, securities accounts and withholding taxes.
Explore the topicSwiss securities accounts for German residents
Your Swiss securities account as a whole: shares, funds, interest and German tax reporting.
Read the guideSwiss shares while living in Germany
Dividends, Swiss withholding tax and share sales.
Read the guideSwiss interest income for German residents
Bank accounts, fixed-term deposits, bonds and interest income.
Read the guideGermany–Switzerland tax advice
Do you live in Germany and hold funds or ETFs in a Swiss securities account?
We assess fund classification, distributions, the Vorabpauschale, partial tax exemptions, disposal gains, Swiss bank documents, securities account transfers and moves to Germany under German investment fund tax law.
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