DA-1 for US citizens?

Finance, Taxes, Banking, Insurance and Retirement
1
My apologies if this has been asked before--I couldn't find it in the forum.

I'm not sure I understand the purpose of form DA-1 in the Swiss tax return. The description says it is for reclaiming tax on dividends and interest withheld in the US, yet US citizens don't ordinarily have withholding on dividend income--the tax is paid as part of your net filing (so if you live in Switzerland, probably with your quarterly 1040-ES).

Is DA-1 solely for non-US persons who hold securities in the US? Or does it apply to all taxes on dividend and interest income in the US, regardless of whether the tax is withheld or paid later?

Thanks.

2
In your situation you don't need it. If they kept no tax , there can be no refund .

DA-1 is a form to claim back tax (sometimes partially) on bank interest or share dividents located in another country where tax was taken there "at source". It's not just for the USA, but a long list of countries, (but not all countries, only whose who have a double taxation treaty with CH).

So basically:

- if you have a bank account abroad (or share dividends)

- and the bank abroad kept tax on the interest or dividends "at source"

- and the tax treaty says you should only pay tax on the country you are living

- and there is no easy way to get this tax back (ie, there is no simple form to complete in the foreign country)

- then you can complete DA-1 and get a refund from the Swiss .

But the amount you get back is up to (max) the amount of corresponding tax in Switzerland.

So eg, if you have a bank account in say Australia, you earned interest and the australians kept 100 chf in tax, then you complete DA-1 and one of two things happen:

- if the tax in CH is 150 chf, you pay only 50 to the swiss (reduce by the amount the australians kept)

- if the tax in CH is less than 100 chf, they waive that and you pay nothing to the swiss.

So in practice you end up paying tax which is the maximum of what the tax would be in the two countries.

For small amounts of tax, i think under 50 CHF, to simplify, you can just reduce the interest by the tax and just write this down (no need for a DA-1). For larger anounts of foreign tax refund you need to complete DA-1 and have proof of the tax witheld abroad.

Of course, you also need to declare the interest/divident on the swiss tax and pay Swiss tax on it. This obligation remains , even if you dont ask for a refund via DA-1. So, for example, you cannot say: well the australians already took tax on the interest, so I don't need to declare it on the swiss tax form. You must do it, and (well, optionally) ask for a refund of the australian tax via DA-1.

PS: (your last question): It's only for withheld tax. It doesn't make sense for tax paid later (via a tax return) as in these cases there would never be an overpayment of tax. Actually, doing a tax return is a reason why you cannot use a DA-1, as in that case you can recover the foreing tax directly from the foreign tax authorities, without the need to involve the Swiss. Also, being an american, the tax treaty says between US-CH says that USA citizens can be taxed double so even if they witheld you could not claim it as a refund, as it was 'correctly' taken in the first place (ie, you owe it). But if I am not an american and don't live there so I don't have to pay any USA taxes, but I have a bank account in the USA or shares there, and the USA kept tax on the interest or dividents, then I can claim all of this tax back via DA-1.

3
My experience is different, about 90 days after filing a DA1 I get a refund of all the withholding tax.

The income is posted as income in my tax return & I pay tax in the same way as I do from employment.

I have a C permit.

4
Thanks for answering, slingb. That matches my understanding.

So my next question: my professional tax preparers last year, I guess mistakenly, filed a DA-1 on my behalf. Is there a way to file a correction for last year's tax form and pay any difference I may owe?

5
Did they show tax had been deducted? they would have needed evidence that tax was deducted for any refund to be made.

6
Yes, they claimed a withheld tax that matches the US qualified dividends rate of 15%. They only did this for my taxable American accounts, so e.g. IRAs and 401ks were excluded.

This made me think that DA-1 was for all foreign tax on interest and dividend income, but that seems inconsistent with my reading of DA-1 (and slingb's answer).

For what it's worth, this was filed by a major international accountancy. Which doesn't mean they're not wrong, but it is a bit perplexing.

7
Have you received the refund transferred to your bank? If not it looks like it was not accepted.

BTW there is a question asking if your a US person, social security no.......

8
Yes, I did receive a refund--not for the full amount I paid in tax on interest on DA-1-listed accounts in the US, but a refund for foreign interest taxed nonetheless.

And yes, I did indicate that I am a US citizen. Additionally, my accountant knew this and, as I said, applied some rationale to which accounts were listed on DA-1 and which were listed in Wertschriften- und Guthabenverzeichnis, though to be honest the rationale is somewhat unclear to me.

Pretty strange, huh?

9
If the tax office has accepted a return done by a big accountancy practice, I would not do anything. I have had the tax office claim 5 errors on my Wertschriften & Guthanebverzichnis once. I appealed 4 as they were clearly blind, I had left the balance of my rental deposit account, however they accepted the appeal for all 5 items. They don't have a clue either.

10
Well, that's true. Why look a gift horse in the mouth?

It's not a huge amount of money, however, and I'd be happy to pay it for the sake of honesty. But I'm not really sure how to (or even if I actually owe it!).

Partially I was trying to determine if I should do what Unnamed Big Three Accounting Firm did while I try to do my own return this year, since I've mostly been cribbing from their work. Seems like not.

Thanks for the helpful posts. I think I'll just assume they knew what they were doing and leave out DA-1 this year now that I'm on my own.

11
I am in a similar situation. One of the Big 4 prepared my tax return the last year and they did a DA-1 for the US source dividends (not interest) even though nothing was withheld in the US, and which was refunded by the canton tax office a couple of months later.

Rationale given was that the DA-1 is not just for claiming back withheld tax but also to enforce the US-Swiss tax treaty, which says that US source dividends are taxed by the US at a rate of 15%. So since you are still taxed in CH on your worldwide income as a Swiss tax resident, looks like the Swiss refund you the amount you are taxed too much.

12
Interesting.

Well, maybe they're right. They are the pros. Though their US office made a lot of mistakes on my US tax return last year, so I'm quite skeptical of that professionalism now.

It's somewhat pointless to reclaim this, I think, in that one should then in theory adjust one's Foreign Income Tax Credit to reflect the refund and thus pay the refund back to the Americans at a 100% rate. So I don't really care if I pay this to the Swiss or not--but I do care about filing correctly.

For me, they did it for interest and dividends on most accounts, but not all. I can't see any real rhyme or reason to the excluded accounts, to be honest, except that they excluded those where the amount was quite low so it made little difference.

13
On re-read DA-1 does ask if you're a US citizen, and the pauschale Steuer seems to be the appropriate column for qualified dividends. At least, that's my understanding.

*shrug*

14
One further question:

I am not a US citizen but have investments in US which withhold the 15%.

I'm doing the Zurich DA-1 tax declaration form, and there I declare all dividends and the amount withhold by the US authorities. I see that all the dividends are considered income for my tax declaration. Since I'm asked to provide IBAN for the return of the withhold amount, everything seems about right.

Single question: In the DA-1 form I'm asked for the identification of a representative ("Treuhänder-UD"), which I'm not using as I planned to do it all myself. Do you know if this is really required ?? If so, why ?

Thanks

15
The DA-1 has to filled out by anyone filing a Swiss return who has anykind of financial products (stocks, funds, bonds, etc.) outside of Switzerland. That includes products in the USA. If the depot is based in Switzerland (there is a check box for it in private tax), then the Steuerrückbehalt has to be reclaimed and included on the form. Otherwise one can just list the 15% Pauschale. This form has to be sent seperately to the Steueranrechnungsamt and a copy of it has to be included in your tax filing. In the end you will get 15% of your dividend returned to you (assumed tax that you have paid) and will be taxed locally on your dividends and fortune.

16
As far as I know, a truehand is not mandatory. I dont use one either. Also you must not delare the amounts withheld by the USA. Simply take the 15% pauschale. If the depot is based in Switzerland then you also have to include this amount in the Steuerrückbehalt USA colum. Privat tax will do this automatically.

17
A bit if a noob question, when you submit a DA-1, so you mirror the entry on the Wertschriften-und Guthabenverzeichnis form as well?

I got back information from the tax people that for my UK accounts, "Dieser Ertrag unterliegt nicht der eidgenössischen Verrechnungssteuer (ausländischer Titel) und ist deshalb in Kolonne B zu deklarieren."

(This income is not subject to Swiss withholding tax (Foreign titles) and is therefore to be declared in column B.). Is that still true if I fill in the DA-1, primarily to get the tax back from the dividend payments for a Canadian stock traded on the US exchange but paid to me in GBP! The Canadians take 25% and I think the DA-1 only allows for 15% - but better than nothing.

cheers,

Slayer

18
If you put it in DA-1 you exclude it elsewhere. It's for income with withholding tax which you want to reclaim, if you put it in B you won't get it repaid.

Don't expect the tax office to have a clue about foreign dividends

19
thanks fatmanfilms.

you would think after doing 3 of these, I would have a proper clue by now, and not be late with my 4th, but I keep learning each time some small thing (in this case, big thing) and I have only ever got feedback from my 2012 one so far...already spotted a mistake in my 2014 one... :-)

did I read somewhere its only worth claiming on DA-1 if its more than 50CHF?

do not underestimate my lack of German language skills... :-)

20
Just actually just read the bit where you need to submit this DA-1 form to the Steueranrechnung, along with the tax return. I really must do my tax forms in daytime...and on time..!

Do you know if you can retrospectively claim this?

cheers,

Slayer.