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Shares are a key component for many Swiss investors when it comes to building wealth. But how are share profits and earnings taxed in Switzerland? And what’s new in 2025?
In this guide, you'll get a comprehensive overview of share taxation in Switzerland. We explain the current tax rules, what the withholding tax is about, and provide practical tips on how you can optimise your taxes while investing. The goal is for you to understand the tax on share profits and take timely action to minimise your tax burden – objectively, thoroughly, and tailored to the needs of investment-oriented professionals.
Table of Contents
Basics of share taxation in Switzerland
Before we dive into the details, let's take a look at the fundamental principles: In Switzerland, there is no specific capital gains tax on share profits for private investors – a significant advantage compared to many other countries.
Capital gains from the sale of shares are tax-free as long as you are acting as a private individual. This means: If you sell your shares at a profit, you generally do not need to tax the gain as income. However, private losses from share sales cannot be deducted from taxes either.
Things are different with regular earnings from shares. Dividends – the profit distributions made by companies to their shareholders – and interest income (e.g. from bonds or deposits) are subject to income tax.
This means that dividends must be added to your income in the tax declaration and are taxed at your personal tax rate. The only exception is tax-free dividends from so-called capital reserves (KER): Companies can distribute a portion of the dividend from these reserves, and that portion (up to 50% of the total dividend) remains tax-free for private investors.
In addition to income tax on earnings, Switzerland – unlike many countries – also has wealth tax. Your share portfolio is assessed as part of your wealth as of 31 December and must be declared in the securities register of your tax return.
Cantons and municipalities levy wealth tax on this net wealth, with rates varying depending on the canton.
Important: All the aforementioned rules apply to private individuals in Switzerland who hold their securities as part of their private wealth management. Companies or professional traders are subject to different regulations. This raises the question: When is someone considered a private individual, and when are they considered a professional securities trader? The answer is crucial for whether your share profits remain tax-free.
How share profits will be taxed in 2025
As mentioned, share profits (capital gains) for private investors are generally tax-free – and this has not changed in 2025. However, there are important criteria to consider. The tax authorities will check whether someone is still considered a private investor or has become a professional securities trader.
If you are classified as a professional trader, the share profits will be considered income from self-employment and thus fully taxable. The consequence: The profits will be added to your regular income, which can lead to a significantly higher tax burden – known as "tax progression". Additionally, social security contributions (AHV/IV) may need to be paid on these profits.
Fortunately, there are clear safe-harbour criteria that, if met, generally ensure that you are not considered a professional trader. The Swiss tax administration has defined five key points:
Minimum holding period: You should hold each purchased share in your portfolio for at least 6 months before selling it. Short-term day trading or speculative buying and selling increases the risk of being classified as a trader.
Transaction volume: Your annual trading volume (the sum of all buys and sells) should not exceed five times the value of your initial portfolio. For example, if you start the year with a portfolio worth CHF 50,000, you should not engage in more than CHF 250,000 worth of transactions.
No dependence on livelihood: Do not rely on capital gains as your primary source of income. A rule of thumb is that profits from securities should make up less than 50% of your annual net income. If you are not dependent on stock market profits to pay your bills, you will generally remain a private investor.
Own capital: Only invest your own capital, with little or no leverage (loans). For example, trading with borrowed money (e.g. Lombard loans) signals an entrepreneurial approach.
No speculative derivatives: Avoid using derivatives (options, futures) for speculative purposes. Derivatives should only be used to hedge existing positions, not for additional profit maximisation.
If all five criteria are cumulatively met, the authorities will generally rule out professional trading – you will be classified as a private investor and your share profits will remain tax-free. If you do not meet one of the criteria fully, it does not automatically lead to taxation, but the tax authorities will review your case more closely. In case of doubt, it is advisable to provide documentation of your investment strategy (e.g. long-term wealth building rather than short-term trading).
Dividend taxation in Switzerland
If you own shares, you may benefit from dividends. In Switzerland, dividends are automatically subject to a 35% withholding tax. This means that when a Swiss company distributes a dividend, your bank will initially transfer only 65% of the gross dividend to you, with the remaining 35% going to the Swiss Federal Tax Administration.
Don’t worry: These 35% are not a final tax deduction, but a withholding tax. It is designed to ensure that income is correctly declared. Once you declare your dividend earnings in your tax return, you will receive the withheld withholding tax back in full – either as a credit against your cantonal and municipal taxes or as a direct refund.
For those living in Switzerland, this means: Dividends are ultimately taxed at the normal income tax rate, and the withholding tax is simply an advance. To qualify for a refund, you must correctly declare all assets and income – particularly in the securities list of your tax return.
Failing to do so means that the tax authorities will keep the 35% – which is effectively a punitive tax. Unfortunately, this happens to many investors: Estimates suggest that Swiss shareholders lose out on over CHF 14 billion annually because they fail to reclaim taxes owed, particularly foreign withholding taxes.
A special case concerns foreign dividends: For example, if you hold shares in the USA or Germany, dividends are subject to a withholding tax in the country of origin, often between 15–30%. Thanks to double taxation agreements (DTAs) between Switzerland and many countries, Swiss private investors can typically reclaim 15% of the foreign withholding tax.
It’s important to know that the processes involve some effort and are particularly worth it for larger dividend amounts.
Ways to optimise your share investment taxes
Given the tax framework in Switzerland, there are several ways to optimise share investments tax-wise. Below are five common strategies that investors should consider in 2025:
Tax-Free Capital Gains for Long-Term Investments: A long-term investment strategy that considers criteria such as minimum holding periods and trading volume could help maintain this tax status.
Balancing Growth Stocks and Dividend Strategies: Dividends are taxed as income in Switzerland. Investors may therefore want to consider whether a higher allocation of growth stocks or stocks with moderate dividend yields aligns with their tax preferences when planning their portfolio.
Using Tax-Advantaged Retirement Accounts (Pillar 3a): The Pillar 3a provides the opportunity to invest capital in a tax-advantaged manner. You can find the current maximum Pillar 3a amount for 2025 here.
Claiming Tax Deductions Related to Investments: Private investors in Switzerland can deduct certain management costs associated with their securities investments. These include, for example, account fees or costs related to preparing the tax securities list. Depending on the canton, either lump-sum deductions or the deduction of actual costs are allowed. Including these items in your tax return could reduce your taxable income.
The above approaches provide pointers for an informed tax review of share investments. Investors are well advised to carefully assess their personal situation and specific tax aspects, or seek professional advice if needed.
Conclusion: With a clear tax strategy to long-term investment success
Share taxation in Switzerland may appear complex at first glance, but with the right knowledge, tax advantages can be effectively utilised. To summarise, private investors in 2025 will continue to benefit from tax-free capital gains but must declare dividends and assets correctly.
Take advantage of legal options like the Pillar 3a or strategically investing in lower-dividend assets to optimise your tax burden. Stay up to date with the latest regulations and adjust your strategy as needed. Remember that this guide does not replace personalised tax advice. For complex situations – such as very large portfolios, real estate in your portfolio, or international tax matters – it may be wise to consult a specialist. Best of luck with growing your investment strategy!
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