Withholding Taxes in Switzerland

Like  most of the countries, Switzerland applies withholding taxes to companies operating here. The rates at which such taxes are imposed can vary from 0% to 35%, depending on their nature and the nationality of the recipient. At the same time, they can have different rates depending on the provisions of the double tax treaties signed by Switzerland. Our team of Swiss lawyers can offer in-depth assistance on the manner in which withholding taxes are applied.

 

 

As a general rule, withholding taxes are imposed for the following types of payments: 

 

• dividends;

• interest;

• royalties. 

 

 

In the case of the withholding tax on dividends, Switzerland applies a standard rate of 35%, but the payment can be exempted from this tax under the provisions of the Switzerland – European Union (EU) Savings Agreement, on which our Swiss law firm can provide more details. 

 

However, this regulation can only enter into force as long as the parent company owns 25% of the subsidiary’s capital. It is also necessary for the respective company to be a legal entity residing in one of the EU’s member states. 

 

Depending on the stipulations of the double taxation treaties signed by the representatives of the country, the withholding tax on dividends can also be applied at the following rates: 5%, 10% or 15% or 20%.  

 

 

Investors who want to open a company in Switzerland must know that the withholding tax on interest is generally not applicable. There are few situations in which the tax is imposed, as follows: 

 

• interest from Swiss bank deposits;

• interest from bonds;

• interest from bond-like loans. 

 

In the case of the above mentioned situations, the withholding tax on interest is applied at the rate of 35%. 

 

 

Although numerous other countries impose the withholding tax on royalties, businessmen who want to start a company in Switzerland will not be taxed in this case, as the tax is not applicable here. 

 

Businessmen are invited to contact our attorneys in Switzerland for further information on the withholding taxes applicable here.