In Switzerland, there is a withholding tax of 35% on dividends. But you can get 20% of this back if you submit an application. This applies to both individuals and companies. The refund can significantly reduce the strain on your wallet. In this guide, we show you how to obtain a withholding tax refund.
The refund of withholding tax is important for all those who receive dividends in Switzerland. We provide you with all the important information here. They are easy to understand and also help you to be found more easily on the Internet. Our aim is to provide you with clear information. This is to ensure that you are well informed.
Key points
- In Switzerland, a withholding tax of 35% is levied on dividends.
- 20% of the Swiss withholding tax can be refunded upon application.
- Reimbursement requires the submission of a form and confirmation from the local tax office.
- Some brokers provide free “TAX vouchers” for the refund process.
- The correct application can help to avoid double taxation.
What is withholding tax in Switzerland?
Withholding tax in Switzerland is levied directly upon payment to the recipient. It applies to income such as dividends, interest and license fees. This ensures that non-residents pay property tax.
In Switzerland, the withholding tax on dividends is 35%. This can be offset against the final withholding tax in Germany. In this case, 15% of the tax burden in Germany can be credited. This means that you can apply for a 20% refund from the Swiss authorities.
Cross-border commuters and employees who are not resident in Switzerland for tax purposes must also pay withholding tax. The withholding tax in Switzerland depends on the amount of the salary. It is paid monthly, quarterly or annually. Persons without a residence permit also pay withholding tax on their wages. This means that persons who are not resident in Switzerland for tax purposes are taxed.
A comparison of withholding tax between Switzerland and Germany is interesting.
| Country | Withholding tax | Withholding tax |
|---|---|---|
| Switzerland | 35 % | n/a |
| Germany | 25 % | 10 % |
Thanks to the double taxation agreement between the two countries, a 20% refund of Swiss withholding tax is possible. The application for reimbursement can be made for up to three years. This simplifies withholding tax refunds and offers financial relief.
Why a withholding tax refund is necessary in Switzerland
Investors and companies can save a lot of money in Switzerland. This is due to the refund of withholding tax. This tax is levied on income such as dividends and interest. A rate of 35% is automatically deducted. With a double taxation agreement, you can get something back.
Overview of double taxation agreements
Double taxation agreements are in place to avoid double taxation. They apply to individuals and companies. Such an agreement shows which country is allowed to levy taxes. For Switzerland-Germany there is a refund up to three years retroactively.
Legal basis and statutory provisions
Swiss law provides a basis for reimbursement. Double taxation agreements are part of this. You need special forms for this. These are obtained from the Swiss ePortal.
It is important to submit everything correctly and on time. The tax administration usually responds quickly. However, payment may take longer and is made in CHF.
Requirements for the refund of withholding tax
To receive a tax refund in Switzerland, you must meet certain conditions. You should live in a country that has an agreement with Switzerland.
A withholding tax refund form is required to apply for a refund. You must enter your name, address and bank details. Depending on where you live, you may need additional papers.
In Switzerland, 35% withholding tax is usually levied on dividends. Germany has its own tax. But for Germans, Switzerland can pay back 20%. This is stated in the agreement between the countries.
You can even request this refund for the last three years. The money is paid in CHF. Attention: There may be fees for conversion and transfer. The request is sent to the tax authority of the canton in which the pension fund is located.
| Withholding tax deduction | Percentage |
|---|---|
| Switzerland on dividends | 35% |
| Germany withholding tax | 10% |
| Reimbursement according to DBA | 20% |
Today you can also apply online. It is important that you submit all documents correctly and on time. This will help you avoid delays with your Swiss tax refund.
The withholding tax refund process in Switzerland
To get your withholding tax back in Switzerland, you need to be well prepared. The process is clear, but you need to know the rules. This applies to online applications and the submission of documents.
Applying for a refund
Most people now apply for reimbursement online. An important tool is the Snapform Viewer. Use it to fill out the withholding tax refund form and send it digitally. You can find the necessary forms on the website of the Federal Tax Administration.
Necessary documents and form requirements
You need special documents for the tax refund in Switzerland:
- Lump-sum payment: A copy of the payout declaration including the gross amount and date.
- Pensions: A copy of the pension confirmation with the gross amount and duration of the refund.
- Nationality: Each nationality must be indicated for possible tax advantages.
- Withholding tax deduction: The CHF amount, the withholding tax deduction, is important.
Deadlines and processing time
It is important to meet deadlines so that everything runs smoothly. The forms must be complete and correct. Send it to the tax authorities of the relevant canton. Processing can take weeks, depending on the case. Early submission prevents delays.
Common mistakes and how to avoid them
Errors often occur when reclaiming tax. These mistakes can be avoided if you are well prepared and know exactly what is required. A common mistake is filling out the forms incorrectly. To avoid mistakes, follow the instructions exactly and enter all information correctly.
Another mistake with withholding tax refunds in Switzerland is missing the deadlines. Every application has a deadline that should be adhered to. You can find the deadlines on websites such as that of the Federal Tax Administration.
It is also important to enclose all the necessary documents. If documents are missing, the application may be delayed or rejected. Make sure you enclose all documents, such as proof of income and tax certificates.
Follow these tips to avoid mistakes. This ensures that the withholding tax refund process runs smoothly.
- Correct completion of the forms.
- Timely submission of applications.
- Attach all required documents.
Conclusion
Investors who have invested in foreign shares should not overlook the issue of withholding tax refunds in Switzerland. Many do not know that they can get a large part of the withholding tax back. Estimates show that Swiss investors fail to reclaim up to 16 billion euros in taxes every year.
Up to 4 billion Swiss francs could be reimbursed each year. One important step is the use of digital tools. One example is the Divizend tool, which helps to reduce complexity. However, around 75% of investors are not aware of these opportunities. They find the regulations too complicated. The application for refunds can be submitted up to three years after the dividend payment.
Fintechs such as Divizend and institutions such as the Swiss stock exchange SIX offer assistance. They usually work together with banks and major investors. Thanks to a new ePortal from the Federal Tax Administration, the process will soon be easier. These changes could increase the volume of refunds in the future. This is good news for investors.
To take advantage of all the benefits of withholding tax refunds in Switzerland, you need to be well informed. It is important to familiarize yourself with the rules. Careful preparation and punctual submission of the documents are crucial. This is the only way investors can be sure of receiving their tax refunds.