How do I declare a securities account for tax purposes?

A securities account (depot) must be correctly declared in Switzerland in both wealth tax and income tax returns. The holdings as of year-end and the income earned during the year are relevant.

In this article, you will learn how to correctly declare your securities account and what to pay attention to.

Which Taxes Affect a Securities Account?

A securities account is subject to two types of taxes:

• Wealth tax on the depot value as of December 31
• Income tax on interest, dividends, and distributions

Capital gains from the sale of securities in private assets are generally tax-free. Nevertheless, all transactions (purchases and sales) must be declared in the tax return so that the tax authorities can verify whether the conditions for tax exemption are met.

Declaration of Wealth

Reference Date and Valuation

For wealth tax, the holdings as of December 31 are relevant:

• Market value of stocks, funds, and bonds
• Account balance of settlement accounts
• Official tax values from the Federal Tax Administration (FTA)

The FTA publishes an annual list with official values for common securities. These values are binding for wealth tax purposes.

Entry in the Securities Register

The declaration is made in the securities register of the tax return:

• Total according to tax statement or
• Individual listing of each position with tax value

A tax statement from the bank (also called tax register) significantly simplifies recording, as:

• all securities are listed with official tax values
• the wealth position is correctly calculated
• income and withholding tax are already included

Declaration of Income

Taxable Income

The following must be taxed as income:

• Dividends from stocks
• Interest from bonds and accounts
• Distributions from funds (e.g., accumulating funds)

This income is taxable even if the securities were sold during the year.

Important for qualified participations: For participations of at least 10% in the share or equity capital of a company, tax relief applies. In the Canton of Zurich, for example, these dividends are taxed at only around 50% (cantonal) or 60% (federal).

Capital Gains

For private individuals, the following generally applies:

• Capital gains from the sale of securities are tax-free
• Transactions must nevertheless be fully declared
• The tax authorities thereby verify the distinction from commercial trading activity

When does commercial securities trading exist?

Commercial trading is excluded if the following criteria are cumulatively met: the holding period is at least six months, the transaction volume does not exceed five times the securities and credit balance at the beginning of the tax period, and capital gains do not constitute a necessity for financing living expenses.

If these criteria are not cumulatively met, commercial trading may exist. In this case, capital gains are taxed as income from self-employment, and additional AHV/IV/EO contributions of around 10% are due.

Reclaim of Withholding Tax

On Swiss dividends and interest, a withholding tax of 35% is automatically levied and directly withheld by the bank. This can be fully reclaimed if:

• the income is correctly declared as income
• the securities are listed in the securities register

The reclaim occurs automatically through the tax return.

Foreign withholding taxes: For foreign securities (e.g., US stocks), withholding tax is also withheld (in the USA up to 30%). This can be partially reclaimed via Form DA-1 or directly abroad. With double taxation agreements, 15% of the foreign withholding tax can typically be credited against Swiss income tax.

Deductible Costs

The following costs can be deducted for income tax:

Deductible wealth management costs:

• Depot fees for custody and management
• Safe and safety deposit box fees
• Costs for the tax register
• Negative interest on bank deposits
• Collection fees for coupons and dividends

Non-deductible costs:

• Purchase and sale commissions (brokerage fees)
• Stamp duties and stock exchange fees
• Financial and investment advisory costs
• Wealth management mandates (active depot management)
• Flat fees from external wealth managers

Flat-rate deduction: In many cantons, a flat-rate deduction can be claimed instead of actual costs. This typically amounts to 3‰ (0.3%) of the tax value of securities managed by third parties, but no more than CHF 6,000 (e.g., Canton of Zurich). The exact regulations vary by canton.

Which Documents Are Needed?

The following are particularly helpful for correct declaration:

• Tax statement / tax register from the bank
• Depot statement as of December 31
• Statements on dividends and interest
• Receipts for deductible depot fees (if actual costs are claimed)
• Purchase and sale receipts for all transactions

Conclusion

A securities account must be correctly declared in Switzerland both as wealth and with regard to income earned. The decisive factors are:

• the tax value as of December 31 (according to official FTA values)
• the complete declaration of dividends, interest, and distributions
• the reclaim of withholding tax
• the transparent presentation of all purchases and sales (to verify tax exemption of capital gains)
• the distinction from commercial trading activity

With a current tax statement from your bank and proper recording in the securities register, you ensure that your depot is correctly and completely considered for tax purposes. For complex portfolios, frequent trading, or foreign securities, support from a tax advisor is recommended.