Changes on Swiss Withholding Tax Act approved by Federal Assembly

On 20 September 2016, the Swiss Council of States approved an amendment of the Swiss Withholding Tax Act. As a result, the notification procedure for withholding tax on dividend distributions shall – even in case the 30-days-filing-deadline is not met – be granted by the Swiss Tax Authorities, if the relevant conditions for the notification procedure are fulfilled.

The Council of States also accepted a transition rule, which was proposed by the National Council in the amended Swiss Withholding Tax Act. Based on this transition rule, the amended law shall also be applicable for cases which occurred prior to the enactment of the law changes, unless (i) the tax liability or the late payment interest is/are time-barred (“verjährt”) or (ii) was/were already finally assessed prior to 1 January 2011.

As a consequence, taxpayers who had to pay late payment interest due to missing the 30-days-deadline for filing the notification procedure, may in principle retroactively claim back respective late payment interest. After the (potential) enforcement of the new law, the taxpayer will have to make an official request in this regard within one year.

On 22 September 2016, the National Council has settled a last difference in respect of the penal provisions. The provisions agreed by both chambers do now foresee that missing the 30-days-filing-deadline may lead to an administrative fine of up to CHF 5’000.

In a last step, the revision of the Swiss Withholding Tax Act has to be adopted by the final vote of both chambers of the Swiss parliament, which is scheduled for 30 September 2016. In case no referendum is levied (a 100 days-deadline applies), the Federal Council (Swiss government) will – presumably by mid/end January 2017 – determine the exact date of entry into force.


Dividend distributions of Swiss companies are subject to Swiss withholding tax levied at a rate of 35%. For distributions to qualifying parent companies, it is under certain conditions possible for the paying company to apply for a notification procedure, whereas the necessary forms need to be filed within 30 days of the due date of such dividend.

In 2011, the Swiss Supreme Court decided that the 30-days-deadline in order to apply for the notification procedure is a non-extendable deadline, whereas missing this deadline leads to the forfeiture of the notification procedure even if all other conditions would otherwise be met.

The Swiss federal tax administration had thereafter consequently levied Swiss withholding tax in case of a missed notification deadline with the effect that late payment interest is due as of the original due date of the withholding tax (interest rate of 5%). Several court cases in this respect are currently pending.

Next Steps/Call to Action

On 30 September 2016, both chambers of the Swiss parliament are scheduled to confirm in a final vote the revision of the Swiss Withholding Tax Act. In case no referendum will be called, the Federal Counsel will determine the date of entry in to force of the amended Law at the beginning of next year.

The current implications of a missed deadline clearly show the importance of complying with tax compliance requirements.

Although in future the missing of the 30-days-filing-deadline should no longer lead to late payment interest, compliance with all filing obligations will remain of high importance.

We will inform you on further developments in this regard and if potential next steps need to be considered.


Stefan Schmid
Tax & Legal Services
Dr. Remo Küttel
Tax Services
Dr. Sarah Dahinden
Senior Manager
Tax & Legal Services

Published by

Stefan Schmid

Stefan Schmid
Partner, Tax & Legal Services
Birchstrasse 160
Postfach, 8050 Zürich
Tel. +41 58 792 44 82

Stefan Schmid is a corporate tax partner assisting companies in international tax matters, with a special focus on US, Asian and Swiss quoted groups. He graduated at the University of St. Gallen in Business Administration (lic.oec. HSG).

He has over 20 years of experience in assisting multinational groups in their international tax affairs. He further gained extensive experience in assisting groups that operate centralised business models.