Swiss Tax Alert May 2022: changes in withholding tax

On 4 May, the Federal Council adopted changes to the withholding tax on the group declaration procedure.

In Switzerland, dividends are subject to a withholding tax of 35%. The group declaration procedure replaces the payment of withholding tax to the Federal Tax Administration (FTA) and its subsequent reimbursement by a declaration of the taxable benefit.

  • In a domestic context (payment of a dividend from a Swiss company to another Swiss company), the declaration procedure is possible as long as the shareholding corresponds to at least 20% of the share capital of the company distributing the dividend and provided that the declaration is filed in due time.
  • In an international context (payment of a dividend from a Swiss company to a company in a state that has concluded a double taxation agreement (DTA) with Switzerland), the declaration procedure is possible for those who hold a share of the capital equal to or greater than the share provided for in the applicable DTA for which an additional or total tax relief is provided (qualified participation).

In general, the DTAs concluded by Switzerland provide for a quota of 10 to 25%. If the DTA does not specify this quota, national law sets it at 20%. In order to benefit from the declaration procedure, a prior application must be submitted to the FTA. This authorisation is valid for a period of 3 years.

In the context of the withholding tax reform, the Federal Council has put out for consultation a project concerning the extension of the withholding tax declaration procedure for dividends paid within a group of companies.

Changes to withholding tax

Following the consultation process, which was widely supported, the Federal Council adopted the following changes on 4 May:

  • In a national context:
    • The declaration procedure will be allowed for holdings of 10% or more, instead of the current 20%;
    • Its scope will be extended to all legal persons holding such a participation and will no longer be reserved to joint stock companies and cooperative societies.
  • In an international context:
    • The authorisation for the application of the declaration procedure will be valid for a period of 5 years instead of 3 years;
    • The declaration procedure will also be extended to companies within the meaning of the applicable DTA.


These changes, which will come into effect on 1 January 2023, will provide a liquidity benefit to groups between the time of withholding tax collection and the time of repayment. In addition, these changes will reduce the administrative burden on companies and the FTA.

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