Is trading/investing subject to CIT?

[inector]

Hey, a bit confused about the CIT (not capital gains) for trading/investing.

If one buys 1000 EUR worth of ETFs, in like Switzerland, where it's ~15% CIT, does he pay ~150 EUR on them?

Capital gains tax is clear, which is simply tax on profits, but how's CIT treated.

 

[JackAlabama]

Hey, a bit confused about the CIT (not capital gains) for trading/investing.

If one buys 1000 EUR worth of ETFs, in like Switzerland, where it's ~15% CIT, does he pay ~150 EUR on them?

Capital gains tax is clear, which is simply tax on profits, but how's CIT treated.

you live in switzerland?

 

[WorldCitizen99]

Hey, a bit confused about the CIT (not capital gains) for trading/investing.

If one buys 1000 EUR worth of ETFs, in like Switzerland, where it's ~15% CIT, does he pay ~150 EUR on them?

Capital gains tax is clear, which is simply tax on profits, but how's CIT treated.

What I have picked up from my accountant and internet research is the following:
Tax authorities generally distinguish between investing and trading
If you buy and sell securities frequently, in larger volumes, with the intention to make profit, they may consider that activity trading and then it will be subject to income tax as a business activity. If you make relatively low-volume purchases and sales, then they will usually regard this as investment and it will be subject to capital gains tax. It's annoying bc it's a grey area and you don't always know what cutoffs they use to decide between trading and investing.
Of course, with either trading or investing, you only pay tax when you sell and have made some profit.
I don't know about Switzerland specifically. I usually consult the Deloitte or E&Y tax summaries

https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-switzerlandhighlights-2023.pdf

https://assets.ey.com/content/dam/ey-sites/ey-com/en_gl/topics/tax/tax-guides/2023/ey-worldwide-corporate-tax-guide-21-sep-2023-v2.pdf#page=1751

 

[inector]

you live in switzerland?

Assuming yes, but it will be the company which invests.

If you make relatively low-volume purchases and sales, then they will usually regard this as investment and it will be subject to capital gains tax

Interesting, obviously will hire a lawyer for this soon, just curious if it's worth the trouble. It's a big difference, since in many countries capital gains can be 0-1% and CIT is like 5-15%.

 

[WorldCitizen99]

Assuming yes, but it will be the company which invests.

Interesting, obviously will hire a lawyer for this soon, just curious if it's worth the trouble. It's a big difference, since in many countries capital gains can be 0-1% and CIT is like 5-15%.

Is the business of the company the trading of ETFs or other securities, or is it a real business and you are just investing from the business' portfolio?
Are you trading frequently, like daily, or only occasionally?
Your accountant should be able to give you an idea. I doubt you need a lawyer unless your accountant suggests it

 

[JimBeam]

If your company makes profit - it will pay CIT on those profits.

Is the business of the company the trading of ETFs or other securities, or is it a real business and you are just investing from the business' portfolio?

This is a good question so if your company invests it's (after tax) profits into something than it should be fine.
But if that's the main activity of the company - good luck in getting the license and banking (in just about any country - and especially in Switzerland).