At what level of turnover and number of trades does an individual go from 0% capital gains tax to being taxed as a business in Switzerland?
"If you prefer to avoid being classified as a professional securities trader, you should have held the securities that you sell for at least six months. Furthermore, the total volume of all transactions per year should not exceed five times the value of securities and credit balances at the beginning of the tax period and your stock market transactions should not be externally financed. Furthermore, your capital gains per year must not exceed half of your net income and derivatives should only be used as a hedge for your portfolio." Source:https://blog.tagesanzeiger.ch/geldblog/ab-wann-gilt-traden-als-gewerbsmässig --------------------------------------------- " Status as a professional investor By default, investors are viewed by the tax authorities as private investors. Such an investor invests the money he earns in other ways in the stock market. That means he doesn't live off his investments. He just uses the stock market to make extra money. The 5 criteria for classification as a private investor The Federal Tax Office uses five different criteria to classify private investors and professional investors. Retail investors should hold securities for at least six months before selling them. Capital gains of private investors make up no more than 50 percent of their net income. The total volume of transactions (purchases and sales) of a private investor does not exceed five times the value of the investment portfolio at the beginning of the tax period. Individual investors invest with their own money, not with loans. Private investors do not use derivatives (particularly options) unless it is a matter of hedging the risks of their securities. Private investors who can answer yes to all of these criteria will not be subject to capital gains tax in Switzerland. Whereas an investor is considered a professional investor if he fails to meet any of the points. However, exceptions are also possible here, because it is up to the tax office to decide which classification you receive. Basically, tax offices use these criteria as rules of thumb. It should be noted that the first three rules are the most important. In practice, one often has to break two of these rules in order to be considered a professional investor." Source:https://ajooda.ch/kapitalertragsteuer-schweiz/ ------------------------------------------------- " Five conditions determine whether you are considered a professional securities dealer The transaction volume (maximum five times the opening balance) The period of ownership of the securities (holding period longer than six months) If possible no/low external financing: More taxable income from securities than pro rata debt interest The capital gains are less than 50 percent of all taxable income Derivatives are only used for hedging. Please note that an asset management mandate (for example with a bank) does not protect you from being classified as a professional securities trader." Source:https://www.vontobel.com/de-ch/impa...n-gewerbsmassiger-wertschriftenhandler-24557/ -------------------------------------------------- "Stock market profits: taxable or not? 26. April 2023-Benjamin Manz When are stock market profits tax-free in Switzerland? The Moneyland editorial team clarifies. The stock market goes up and down. Inclined stockbrokers are all the happier when they benefit from a dividend payout or can successfully sell their shares and make a profit. But the sheep are not necessarily dry yet. Taxable Dividends When it comes to dividends, the case is clear: Swiss investors have to tax dividends as income. The so-called gross dividend is added to the taxable income – i.e. the dividend before deduction of withholding tax. Example: You own 300 Swiss shares, and a dividend of three francs is paid per share. In total, this corresponds to a gross dividend of CHF 900, which is added to your income for tax purposes. The withholding tax of 35 percent, i.e. CHF 315, will be refunded to you by the tax office. Capital gains are generally tax free When selling securities at a profit, the situation is somewhat more complicated. The decisive factor here is whether, according to the assessment of the tax office, it is a private or a commercial securities trade. Private gains from securities – i.e. capital gains from the sale of private assets – are tax-exempt. In the case of commercial stock exchange trading, however, the profits are taxable as income. Private or professional securities traders The crux: Under certain circumstances, private traders can also be classified as professional securities dealers by the tax authorities. Then the sales profits are added to the taxable income. The crucial question is therefore whether you as an investor are assessed as a commercial or private trader. The 5 criteria of tax administration The Federal Tax Administration FTA has set five criteria for this in a circular. If you want to be absolutely sure that you do not pay capital gains tax, all of the following criteria must be met: You have held the sold securities for at least 6 months (before the sale). Your transaction volume, i.e. the total of the purchase and sale prices of all your securities, is no more than five times the securities and credit balance at the beginning of the tax period in a calendar year. Your capital gains from securities trading are not necessary to make up for lost income for your living expenses. Rule of thumb: Capital gains per tax period should be less than 50 percent of your net income. Your securities purchases are not financed with outside funds. Or: the taxable income such as interest and dividends is greater than the corresponding debt interest. If you trade in derivatives and in particular options, you may only use them to hedge your own securities. Within the framework of these five criteria, the tax offices have a number of discretionary powers. It is therefore possible that you are not considered a commercial trader and do not have to pay any additional taxes, even if you do not meet certain criteria. If in doubt, it is best to contact a specialized trustee or your tax authority. Which securities are affected? moneyland.ch asked some cantonal tax authorities what exactly is meant by securities in the five criteria. Answer: According to the tax authorities, this includes not only stocks, bonds and funds, but also futures, options, swaps, CFDs and other financial instruments." Source: https://www.moneyland.ch/de/boersengewinne-steuern
If u get classified as an "Effektenhändler" as it's called - remember this: Your risk reward is now negative. As you lose money you can't deduct it from taxes but your winners get taxed. Sucks for trading.
not true, you pay taxes on the net winning. And if you have losing years you can deduct them from future winnings up to 7 years forward. It's basically just a one person business (Einzelfirma). Even more if you have other businesses or a job you can deduct your trading losses (as professional trader) from those incomes
Yes of course if it's handled as company it looks better. Then you can also deduct business expenses too.