Taxation
Swiss withholding tax on dividends and interest: the 35% tax and refunds
Receiving a dividend or interest payment after a Swiss tax deduction does not necessarily mean the tax is final. Understand the withholding, how to declare the gross income and when you can claim a refund.
By Sarah Prieur · Swiss certified accountant
At a glance
Key takeaways
- Swiss anticipatory withholding tax is different from payroll withholding tax.
- A taxable CHF 20,000 dividend normally means CHF 7,000 withheld and CHF 13,000 paid to the shareholder.
- Refunds depend on eligibility and a valid claim, generally within three years after the end of the year in which the income became due.
How Swiss anticipatory withholding tax works
Swiss impôt anticipé in French, or Verrechnungssteuer in German, is a federal withholding tax on specified investment income, taxable winnings and certain insurance benefits. Its best-known rate is 35%, notably on taxable dividends paid by Swiss companies. The payer deducts the tax and remits it to the Federal Tax Administration (FTA).
For an eligible Swiss-resident recipient, the withholding can generally be refunded or credited if the income and relevant assets are correctly declared, or the income correctly recorded in a company’s accounts. A refund does not exempt the income from ordinary income tax.
| Dividend example | Calculation | CHF |
|---|---|---|
| Gross dividend | Amount approved | 20,000 |
| Withholding tax | 20,000 × 35% | 7,000 |
| Net payment | 20,000 − 7,000 | 13,000 |
The company’s total outflow remains CHF 20,000: CHF 13,000 to the shareholder and CHF 7,000 to the FTA. The recipient declares the CHF 20,000 gross income, before any participation-related tax treatment, and identifies the CHF 7,000 withholding separately.
Do not confuse dividend withholding with salary withholding
Swiss anticipatory tax is separate from withholding tax on employment income. The taxpayers, forms and deadlines differ. A salary certificate cannot replace an investment-income statement.
| Benefits covered by the relevant withholding-tax provisions | Rate |
|---|---|
| Investment income and relevant taxable winnings | 35% |
| Life annuities and pensions within the insurance-benefit provisions | 15% |
| Other insurance benefits covered by those provisions | 8% |
These categories are subject to statutory conditions and exceptions. They do not mean every insurance payment or an AVS state pension is automatically subject to these rates. Start with the payer’s certificate and the legal nature of the benefit.
How Swiss-resident individuals claim a refund
The claim usually goes through the cantonal tax authority with your tax return and securities schedule. The competent canton is generally the canton of residence at the end of the calendar year in which the income became due.
- Collect the bank’s tax statement, gross income and Swiss tax withheld.
- List the securities and the relevant year-end tax values.
- For unlisted shares, obtain the company details, number of shares, distribution resolution and dividend certificate.
- Reconcile documents from different banks to avoid counting a dividend twice.
The value of an investment for wealth-tax purposes is a separate matter from the dividend it generates. Do not derive a tax value from the dividend alone.
A refund may appear as a credit against cantonal taxes rather than a separate bank transfer. A CHF 7,000 credit reducing your tax balance shows how the withholding was settled; it does not mean the dividend escaped income tax. Check the tax assessment and statement of account.
The claimant must have the legal entitlement to the income and meet the refund conditions. Claiming a deduction belonging to someone else is not valid.
The three-year refund deadline, with examples
Under the ordinary rule, claim within three years after the end of the calendar year in which the taxable income became due. This is a forfeiture deadline, subject to specific statutory exceptions. It differs from processing times and the limitation rules for a claim already validly lodged.
| Year income became due | Ordinary last day to submit the claim |
|---|---|
| 2023 | 31 December 2026 |
| 2024 | 31 December 2027 |
| 2025 | 31 December 2028 |
| 2026 | 31 December 2029 |
Check the dividend’s due date: it may differ from the general meeting date or bank transfer date. Keep the distribution resolution and ensure it agrees with the tax certificate.
An extension for a cantonal tax return does not automatically extend the federal refund deadline. If forfeiture is approaching, establish which separate filing is needed. Saving a draft in a portal is not the same as submitting a claim.
Swiss companies: receiving and paying dividends
A company receiving a dividend
A Swiss legal entity generally claims from the FTA, rather than through an individual shareholder’s securities schedule. The income must be correctly recorded and the refund conditions satisfied. The FTA provides Form 25 and appropriate electronic services.
Reconcile the gross dividend, net receipt and tax withheld to the accounts. Recording only CHF 13,000 of income in the example would omit CHF 7,000 and conceal the refund receivable. Coordinate the claim with the annual accounts without letting the closing timetable overrun the claim deadline.
A company distributing a dividend
The payer has its own reporting, withholding and payment duties. The shareholder’s possible refund does not authorise the company to pay the entire gross dividend without checking the procedure.
A notification procedure can replace payment in specific cases, including eligible group situations. Share ownership alone is not sufficient: check the recipient, participation and required formalities. Dividend approval, distributable funds and the salary-versus-dividend decision are separate issues from the 35% withholding rate.
What if the recipient lives outside Switzerland?
Foreign residence does not automatically remove Swiss withholding tax. A double taxation agreement may permit a full or partial refund, depending on the country, income and recipient’s status. Use the claim procedure and forms applicable to the country concerned.
Some tax may remain definitively payable in Switzerland. The residence country may also tax the income and provide its own double-tax relief. That foreign relief is separate from the claim submitted to the FTA.
Identify tax residence, the due year and gross income, and gather the required residence and withholding certificates. For companies, beneficial ownership and the holding structure can matter. A cross-border worker cannot infer the dividend rules from the treatment of their Swiss salary.
Mistakes that can delay or jeopardise a refund
- Declaring only the net receipt instead of gross income.
- Confusing foreign withholding with Swiss anticipatory tax.
- Duplicating a dividend already included in a bank tax statement.
- Waiting until the deadline without the required evidence.
- Assuming a saved electronic draft has actually been filed.
An omission from a tax return needs prompt attention. In certain circumstances, entitlement can be preserved where the omission was negligent and the income or assets are subsequently declared or added by the authority before the assessment becomes final. A late correction does not automatically restore entitlement; FTA Circular 48 sets out the conditions.
Identify the procedure still open, send the evidence to the competent authority and retain proof of submission. Changing your private copy of the return is not enough. A final assessment requires a different analysis from a return still being processed.
There is no universal refund processing time. Complex or incomplete claims may take several months, so do not treat an unconfirmed refund as immediately available cash.
Frequently asked questions
Is the 35% Swiss withholding tax always refunded?
No. Refund entitlement depends on residence, proper declaration or accounting, the recipient’s legal entitlement and deadlines. A tax treaty may limit a foreign resident’s refund.
Should I declare the gross or net dividend?
Declare the gross income, with withholding identified separately. For a CHF 20,000 dividend taxed at 35%, the net payment is CHF 13,000 but gross income remains CHF 20,000 before the recipient’s applicable tax treatment.
Can I still reclaim tax on income due in 2023?
Under the ordinary rule, a claim may be submitted until 31 December 2026. Other eligibility conditions must also be met, and the claim must actually be filed.
How long does a refund take?
There is no single processing time. The authority, completeness of the claim and checks required affect timing; some claims take several months.
Does a tax-return extension extend the refund deadline?
Not automatically. The cantonal filing extension and federal withholding-tax refund deadline are separate. Check any separate submission needed before the refund right expires.
Sources and further reading
About the author
Sarah Prieur
Sarah is a Swiss certified accountant, partner and head of operations at Karpeo. She supports SMEs and self-employed clients with accounting, tax, VAT and payroll, and oversees the quality of client files and year-end accounts. Before Karpeo, she spent eight years in audit at PwC Switzerland, progressing to manager.
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