Various taxes

Withholding tax

Withholding tax is a tax collected at the source by the Confederation on various capital income (especially on interest and dividends), on cash gains made in Swiss lotteries, as well as on certain insurance benefits. It primarily serves as a fiscal technique to combat tax fraud, encouraging taxpayers to declare to direct taxes their income burdened with withholding tax and the wealth from which these incomes are derived.
It is refundable under certain conditions (by offsetting against cantonal and communal taxes, or in cash). Therefore, withholding tax does not constitute a definitive charge for taxpayers domiciled in Switzerland who fulfill their tax obligations.

Value added tax (VAT)

Value Added Tax (VAT) is a general consumption tax levied by the Confederation. It is one of the main fiscal resources for the State.
VAT is primarily a general tax on consumption and only secondarily a tax on economic transactions. The tax aims to impose non-entrepreneurial final consumption in Switzerland, meaning the consumption of goods and services on Swiss territory.

The standard rate has been 7.7% since January 1, 2018, for all taxable deliveries of goods and services. A reduced rate of 3.7% is applied to accommodation. Certain categories of essential goods and services (food, drinks, books, etc.) are taxed at the reduced rate of 2.5%.

Our tax attorneys can provide advice on VAT matters.

Stamp duty

Switzerland imposes stamp duty on the issuance and trading of securities. This includes issuance stamp duty, negotiation stamp duty, and stamp duty on insurance premiums.
Issuance stamp duty on equity capital covers the issuance and increase in the nominal value of Swiss equity rights.

Levied on Swiss equity rights, it targets the issuance as well as the increase, onerous or gratuitous, in the nominal value of equity rights in the form of:

• shares of Swiss joint-stock companies and partnerships limited by shares;
• equity shares of Swiss limited liability companies;
• equity shares of Swiss cooperatives;
• enjoyment certificates of Swiss companies or cooperatives. Considered as enjoyment certificates are documents bearing rights to participate in net profit or liquidation result;
• participation certificates of Swiss companies, cooperatives, or commercial enterprises of public law status.

Negotiation stamp duty covers the purchases and sales of Swiss and foreign securities by Swiss securities traders.
It applies to the purchase and sale of Swiss and foreign securities carried out by Swiss securities traders.

The negotiation duty amounts to:

• 1.5 ‰ for Swiss securities and
• 3.0 ‰ for foreign securities.

For securities lending and borrowing transactions consisting solely of a loan of securities, stamp duty is not due on these transactions due to the absence of onerous transfer. The same applies to securities repurchase transactions, which are essentially financing operations.
Stamp duty on insurance premiums applies to premium payments for liability, fire, multi-risk, and household insurance.

It mainly subjects premium payments for liability insurance, fire insurance, vehicle body insurance (casco), and household insurance.

As the name suggests, the right to insurance premiums is calculated on the amount of the insurance premium and generally amounts to 5%.

Single premium life insurance policies subject to repurchase are subject to a duty of 2.5%.

The tax obligation generally lies with the Swiss insurance institution.

Person insurance such as life insurance with periodic premium payments, health insurance, accident insurance, disability insurance, and unemployment insurance are exempt.

Our tax attorneys can advise you on stamp duty matters.