Withholding tax
Withholding tax is a tax levied at source by the Swiss Confederation on various returns on movable capital (notably interest and dividends), on cash winnings from Swiss lotteries and on certain insurance benefits. It is primarily a tax technique designed to combat tax evasion, by encouraging the taxpayer to declare income subject to withholding tax and the assets from which this income derives to direct tax authorities.
It is refundable under certain conditions (by offset against cantonal and municipal taxes, or in cash). Withholding tax is therefore not a definitive burden for taxpayers domiciled in Switzerland who meet their tax obligations.
Value-added tax (VAT)
Value-added tax (VAT) is a general tax on consumption levied by the Swiss Confederation. It is one of the State’s main tax resources.
VAT is first and foremost a general tax on consumption, and only secondarily a tax on economic transactions. The purpose of the tax is to tax non-enterprise final consumption on Swiss territory, i.e. to tax the consumption of goods and services on Swiss territory.
The standard rate has been 7.7% since January
1, 2018 for all taxable supplies of goods and services. A reduced rate of 3.7% applies to accommodation. Certain categories of essential goods and services (food, drinks, books, etc.) are taxed at the reduced rate of 2.5%.
Our tax lawyers can advise you on VAT matters.
Stamp duty
Switzerland levies stamp duty on the issue and trading of securities. This includes stamp duty on issues, stamp duty on trading and stamp duty on insurance premiums.
Stamp duty on equity capital covers the issue and increase in par value of Swiss participation rights.
Levied on Swiss participation rights, its purpose is to issue and increase the par value, for valuable consideration or free of charge, of participation rights in the form of :
- shares in Swiss public limited companies and partnerships limited by shares ;
- shares in Swiss limited liability companies ;
- shares in Swiss cooperatives ;
- dividend-right certificates issued by Swiss companies or cooperatives. Dividend-right certificates are documents relating to participation rights in net profit or in the result of liquidation;
- participation certificates issued by Swiss companies, cooperatives or commercial enterprises under public law.
Trading stamp duty applies to purchases and sales of Swiss and foreign securities by Swiss securities dealers.
It applies to the purchase and sale of Swiss and foreign securities by Swiss securities dealers.
The negotiation fee is :
- 1.5 ‰ for Swiss securities and to
- 3.0 ‰ for foreign securities.
As securities lending and borrowing transactions consist solely of the lending of securities, stamp duty is not payable on these transactions in the absence of a transfer for consideration. The same applies to repurchase agreements, which are essentially financing transactions.
Stamp duty on insurance premiums applies to premium payments for liability, fire, comprehensive and household insurance.
It mainly covers premium payments for third-party liability insurance, fire insurance, vehicle body insurance (casco) and household insurance.
As the name suggests, insurance premium duty is calculated on the amount of the insurance premium and is normally 5%.
The exception is single-premium, surrenderable life insurance, which is subject to a duty of 2.5%.
In principle, the tax liability lies with the Swiss insurance institution.
Personal insurances such as life insurance with periodic premium payments, health insurance, accident insurance, disability insurance and unemployment insurance are exempt.
Our tax lawyers can advise you on stamp duty.
