Unexpected return to EU from Switzerland: VT vs VWCE

[c4ccheyenne]

Hi everyone!!! I would like to take advantage of the hive mind of the subreddit to do some brainstorming.

Origin story:

M30, Italian citizen, 4 months ago I signed a contract with a large corp in Switzerland and in January this year I moved there and started working there.

In preparation for the move I then took out the various ""investments"" made with my local bank (youthful mistakes), kept them liquid and planned to invest about 100k in VT.

Yesterday I received (finally) the AHV/AVS/OASI number and actually registered with the broker.

Thing is, two days ago, I received news that the company will undergo a restructuring and my position will no longer exist. ()

I still have no idea whether I will stay here, return to Italy or move somewhere else, but I still have a few months to decide: enough to think (at least for this year) to stay here as a tax resident.

Please note that that 100k is "the long-term investment" and I won't need it, regardless of the fact that I no longer have a job right now.

So what:

The question is: If you were in my position, in terms of investments would you take advantage of being a Swiss resident to be able to buy VT, or would you go directly to VWCE?

Can you help me understand how to do the math to figure out what would be worthwhile? Spreadsheet link

1. I am not sure if I got the correct data regarding dividend % values
2. I used VWRD as a proxy for VWCE's (virtual) dividends.
3. I hypothesize reinvesting VT's dividends (in VWCE or its USD twin: VWRA, once I am a resident of Italy again, as I won't be able to keep buying VT)
4. To VT values, I subtract 26% tax (for dividends in Italy), to "VWCE" I don't because it would be accumulation (not taxed in Italy) and I don't count on selling.

Thanks!

tldr: Just moved to Switzerland, got unlucky and laid off. 100k to invest: VT or VWCE?

 

[qmedic]

@c4ccheyenne Wont you lose access to US ETFs like VT once you move to Italy?

 

[wordsword]

@qmedic No, he won't. The problem is that in Italy taxes are higher for ETFs like VT.

In Italy, taxes are fixed at 26% only for harmonized ETFs (we pay 26% on the capital gain).

 

[yunella]

@qmedic (I didn't totally forget the password for the previous throwaway, don't mind me)

Assuming I keep my broker that has the assets (and don't switch to an Italian one) no, I wouldn't be able to buy more, but I could still keep it (and sell it, I assume...)

 

[olliemagoo]

@c4ccheyenne Were you working for a certain company starting with an F?

 

[xadoor]

@olliemagoo ?

 

[olliemagoo]

@xadoor Nevermind

 

[yunella]

@olliemagoo Actually, no! But if you're in a similar situation, *virtual hug*

(I didn't totally forget the password for the previous throwaway, don't mind me)

 

[shirel]

@c4ccheyenne Facing kind of the same dilemma, should I sell all my vwce and buy vt if i plan to stay in Switzerland?

 

[sonofmatthew]

@shirel Why though? What would the advantage be over holding VWCE?

 

[shirel]

@sonofmatthew Less taxes for usa based etfs

 

[sonofmatthew]

@shirel How is it less taxes? Aren’t both tax free on capital gains and dividends counted as income?

 

[felicitypenny]

@sonofmatthew Dividend taxes are reclaimable from US ETFs because of a CH USA tax treaty.

IE ETFs have no dividend taxes, but they pay the US taxes to the US - thus you can't recoup them at all, they're gone.

 

[sonofmatthew]

@felicitypenny Are you talking about dividend taxes withheld at the source? A red regular dividends from etf taxed as part of your income regardless of the etf domiciliation?

 

[felicitypenny]

@sonofmatthew Yes, we're talking about withholding taxes of different countries.

Swiss income taxes have to be paid no matter what.

 

[realizer]

@shirel And lower TER as well

 

[shirel]

@realizer Indeed, quite significant difference

 

[yunella]

@shirel If you have 100k laying around, buy VWCE, I'll buy VT and we can switch if either of us are unhappy!

If you plan to stay in CH, I'd say to do so: VT has a lower TER and actually distributing funds are easier to declare, as you'd still have to declare the virtual dividends of VWCE

(I didn't totally forget the password for the previous throwaway, don't mind me)

 

[realizer]

@c4ccheyenne I think just wait if you can find another job, if you are 100% sure you will go back to Italy then yes move from VT to VWCE.

 

[yunella]

@realizer I don't even have to switch, if I managed to buy beforehand I probably wouldn't even think about it.

Why tho? By my calculations (which might totally be wrong) VT theorically is still better than VWCE, even with the added taxes on dividends - Thing is, I'm not sure about the calculations