Amendments to exemption at source for Swiss withholding tax as of January 1st, 2023

Revised rules on exemption at source for Swiss dividend withholding tax

On May 4^th, 2022, the Swiss Federal Council amended the ordinance on withholding tax. The current requirements for the application of the exemption at source (so-called "notification procedure"; Meldeverfahren) for Swiss dividend withholding tax will be relaxed.

Revised rules

Applying as of January 1^st, 2023, the new rules intend to provide easier access to the exemption at source:

• Intra-group dividends between Swiss entities: notification procedure to apply for shareholdings of at least 10%
• Intra-group dividends cross-border context: notification procedure to apply for shareholdings of at least 10% (if tax treaty does not provide for a different minimum shareholding for the preferential treaty rate)
• Withholding tax clearance for cross-border dividends: valid for five years instead of three
  
  

Extension to other legal entities such as foundations and cooperatives

Notably the changes also allow for other legal entities aside from corporation to access the exemption at source. For instance, foundations and cooperatives are currently excluded from the scope in an international context – even though there are a multitude of investments held in Swiss entities either by foundations or cooperatives.

Entry into force

The new rules will enter into force on January 1^st, 2023. The rules will apply for new requests after the date of their entry into force, i.e., existing withholding tax clearance forms will remain valid only for three years.