Switzerland withholds 35% tax on dividends (Verrechnungssteuer) at source, but most of this amount can be reclaimed by foreign investors through Double Taxation Treaties (DTT). This guide explains how the system works and how to recover your money. > "Over the past 20 years, I've helped hundreds of international clients navigate Swiss dividend taxation. The key insight: the 35% withholding tax is not your final tax burden—it's a starting point. With proper documentation and understanding of DTT provisions, most foreign investors reduce their effective rate to 0-15%. The challenge isn't the law itself; it's knowing which forms to file and when." — Markus Pritzker, SwissFirma Disclaimer: This article provides general information on Swiss dividend taxation and does not constitute legal, tax, or financial advice. Tax laws are complex and subject to change. Consult a qualified Swiss tax advisor or attorney for advice specific to your situation. SwissFirma accepts no responsibility for any loss or damage arising from reliance on this information. ## What is Swiss dividend withholding tax (Verrechnungssteuer)? Verrechnungssteuer is a federal tax deducted at source when a Swiss company pays dividends. The Swiss Federal Tax Administration (FTA/ESTV) collects this tax to ensure income is properly declared. For Swiss residents, it functions as an advance payment—fully refundable upon correct declaration in the annual tax return. For non-residents, it serves as a mechanism to enforce tax compliance, with refund eligibility determined by Double Taxation Treaties. The tax applies to dividends from Swiss corporations (AG) and limited liability companies (GmbH), interest on certain bonds and deposits, and lottery winnings above specified thresholds. The primary purpose is to prevent tax evasion by ensuring that income recipients declare their earnings. Swiss residents reclaim the full 35% by including dividends in their tax returns; foreign investors reclaim partial amounts based on treaty provisions.

Swiss Company

Pays 100 CHF Dividend

→

↓

FTA/ESTV Withholds 35 CHF

(35% of gross dividend)

→

↓

Investor

Receives 65 CHF

Caption: Standard withholding tax mechanism in Switzerland.

### Switzerland dividend tax rate: the 35% rule The standard withholding tax rate on dividends in Switzerland is 35%. This rate applies uniformly to all dividend payments from Swiss companies, regardless of the recipient's residency status. The 35% is deducted automatically by the paying company before the dividend reaches the shareholder's account. This is not the final tax burden for most investors. Swiss residents can reclaim the full 35% by declaring dividends in their annual tax return. Foreign investors can reclaim part of the 35% based on applicable Double Taxation Treaties, often reducing the effective rate to 0%, 5%, 10%, or 15%. For 2025, the 35% rate remains unchanged. ### Key distinction: withholding tax vs. capital gains tax Withholding tax applies to dividend income—cash distributions from a company to its shareholders. Capital gains tax, by contrast, applies to profits from selling shares. In Switzerland, private investors generally pay no capital gains tax on shares unless classified as professional traders. This distinction is critical for tax planning. If you hold Swiss shares as a private investor, selling them generates no federal tax liability. However, dividends from those same shares are subject to the 35% withholding tax (with refund options). This makes dividend taxation the primary tax event for equity investors in Switzerland. For a broader understanding of the Swiss tax system, see Types of taxes in Switzerland. {{cta:cta-1}} ## How to reclaim Swiss dividend withholding tax: step-by-step guide The refund process is standardized for non-residents from countries with a Double Taxation Treaty (DTT) with Switzerland. The procedure involves three main steps: verifying eligibility, gathering documents, and filing a claim with the Swiss Federal Tax Administration (FTA/ESTV). ### Step 1: check your eligibility for refund The primary condition for reclaiming Swiss withholding tax is tax residency in a country that has a DTT with Switzerland. You must be the beneficial owner of the dividends and meet the treaty's requirements (e.g., minimum shareholding thresholds, holding periods). Switzerland has signed DTTs with over 100 countries, including the United States, United Kingdom, Germany, France, Canada, Singapore, and the UAE. Each treaty specifies reduced withholding tax rates and conditions for refund. To verify if your country has a DTT with Switzerland, consult the official list on the FTA/ESTV website: Swiss Federal Tax Administration – Double Taxation Treaties. For detailed country-specific guidance, see Double Tax Treaties in Switzerland. ### Step 2: gather required documents The refund application requires specific documentation to prove your tax residency and beneficial ownership. The exact forms depend on your country of residence, but the core documents are consistent. #### Refund claim form Each country has a designated form for Swiss withholding tax refund claims. For example, Form 82I for U.S. residents claiming treaty benefits, Form 91 for Irish residents. Download the correct form from the FTA/ESTV website: FTA/ESTV Forms and ePortal. Country-specific forms are listed under the international tax law section. #### Certificate of tax residency This document, issued by your country's tax authority, confirms that you are a tax resident for the relevant tax year. It must be certified by the competent authority (e.g., IRS in the U.S., HMRC in the UK). The certificate should cover the period when the dividends were paid. Without this document, the FTA/ESTV cannot verify your treaty eligibility. #### Proof of dividend payment You must provide evidence that dividends were paid and that Swiss withholding tax was deducted. Acceptable documents include a tax voucher issued by the paying bank or custodian, showing the gross dividend amount and the 35% withholding tax deducted, or a broker statement or bank statement confirming the dividend credit and tax withholding. A tax voucher is the preferred document, as it is the official record recognized by the FTA/ESTV. ### Step 3: submit your claim to the Federal Tax Administration (ESTV/FTA) Once you have completed the refund form and gathered supporting documents, submit the application to the Swiss Federal Tax Administration. The postal address is: Eidgenössische Steuerverwaltung (ESTV) Bundesgasse 35 CH-3003 Bern Switzerland As of 2025, the FTA/ESTV primarily accepts applications via postal submission for withholding tax refund claims from foreign investors. Check the FTA/ESTV website for updates on digital filing options. The FTA/ESTV processes applications in the order received. On average, expect 8-10 months for a refund to be issued after submission. ### Critical: filing deadlines for refund claims Refund claims are generally permitted within five years following the calendar year of payment. This is a strict deadline. If you miss it, you forfeit your right to reclaim the withheld tax. Example: For dividends received in 2024, the deadline to file a refund claim is December 31, 2029. This 5-year window applies to most DTT countries. Some treaties may specify different deadlines, so always verify the terms of the specific treaty applicable to your situation. ## Dividend tax for foreigners and non-residents in Switzerland Non-residents investing in Swiss equities face the 35% withholding tax at source, but the final tax burden depends on the Double Taxation Treaty (DTT) between Switzerland and the investor's country of residence. The DTT determines the reduced withholding tax rate and the refund mechanism. ### Role of Double Taxation Treaties (DTT) DTTs allocate taxing rights between countries and prevent double taxation. For dividends, the treaty typically allows Switzerland to withhold tax at a reduced rate (e.g., 15%, 10%, 5%, or 0%) instead of the standard 35%. The difference between 35% and the treaty rate is the amount you can reclaim. How it works: 1. Swiss company withholds 35% at source 2. You file a refund claim with the FTA/ESTV 3. The FTA/ESTV refunds the excess amount (35% minus the treaty rate) 4. You pay any remaining tax in your country of residence, with a credit for the Swiss tax paid For example, if the treaty rate is 15%, you reclaim 20% (35% - 15%) from Switzerland. The remaining 15% is credited against your domestic tax liability. For more details on specific treaties, see Double Tax Treaties in Switzerland. ### Example: reclaiming tax for a UK resident The Switzerland-UK Double Tax Treaty sets the withholding tax rate on dividends at 15%. Here's how the refund calculation works: 1. Gross dividend: 100 CHF 2. Swiss withholding tax (35%): 35 CHF deducted at source 3. Net dividend received: 65 CHF 4. Treaty rate (UK): 15% 5. Refund from Switzerland: 35% - 15% = 20% (20 CHF) 6. Final Swiss tax: 15 CHF After reclaiming 20 CHF from the FTA/ESTV, your total Swiss tax burden is 15 CHF (15% of the gross dividend). You then declare the gross dividend (100 CHF) in your UK tax return and claim a foreign tax credit for the 15 CHF paid to Switzerland.

Refund Example: UK Resident Investor

Gross Dividend

100 CHF

Swiss Withholding Tax (35%)

- 35 CHF

Initial Amount Received

65 CHF

↓

Refund Claimed from Switzerland

+ 20 CHF

(35% initial tax - 15% treaty rate)

Final Swiss Tax Paid

15 CHF

(15% DTT Treaty Rate)

Caption: Breakdown of the tax refund process for a foreign investor under a DTT.

### DTT rates for different countries (comparative table) The table below shows reduced withholding tax rates under Switzerland's DTTs with selected countries. Rates may vary based on shareholding thresholds and holding periods.

Country	DTT Rate (%)	Residual Swiss Tax (%)	Refund Amount (%)	Notes
United States	15	15	20	Standard rate for portfolio dividends; 5% if shareholding ≥10%
United Kingdom	15	15	20	Standard rate
Germany	15	15	20	0% if shareholding ≥10% for 12 months
France	15	15	20	0% if shareholding ≥10% for 12 months; anti-abuse clause applies
Canada	15	15	20	5% if shareholding ≥10%
Singapore	15	15	20	5% if shareholding ≥10%
UAE	15	15	20	0% if shareholding ≥10% and conditions met
India	10	10	25	Increased from 5% to 10% in 2025
Netherlands	15	15	20	0% if shareholding ≥10% for 12 months
Austria	15	15	20	0% if shareholding ≥10% for 12 months

Note: Rates shown are for portfolio dividends (shareholding <10%). Many treaties offer reduced rates (often 5% or 0%) for substantial shareholdings (≥10%) held for a minimum period (typically 12-24 months). Always verify the specific treaty provisions for your situation. {{cta:cta-1}} ## Comparison: Swiss resident vs. non-resident The tax treatment of dividends differs fundamentally between Swiss residents and non-residents. The table below summarizes the key differences.

Parameter	Swiss Tax Resident	Non-Resident (from DTT Country)
Initial withholding	35% withheld at source	35% withheld at source
Refund/credit mechanism	Full refund upon declaration in annual tax return; dividends taxed at progressive federal (0–11.5%) + cantonal rates	Partial refund based on DTT; reduced rate (0–15%) depending on treaty
Final tax burden	0–11.5% federal + cantonal (total 22–45% depending on canton); partial taxation relief for qualified participations (≥10% shareholding)	0–15% Swiss tax (per DTT); remaining tax paid in country of residence with foreign tax credit

Dividend Tax: Swiss Resident vs. Foreign Investor

Swiss Tax Resident

• Initial Withholding: 35% at source.
• Refund: Full 100% refund (35%) after declaring in annual tax return.
• Final Tax Burden: Taxed at progressive income tax rates (federal + cantonal).

Non-Resident (DTT Country)

• Initial Withholding: 35% at source.
• Refund: Partial refund based on the Double Taxation Treaty (DTT).
• Final Tax Burden: Reduced Swiss tax (typically 0-15%), with credit available in the home country.

Caption: Key differences in the tax treatment of dividends for residents and non-residents.

Key distinctions: - Swiss residents declare worldwide income, including dividends, and pay tax at progressive rates. The 35% withholding tax is fully refunded as an advance payment. Effective tax rates range from 22% (low-tax cantons like Zug) to 45% (high-tax cantons like Geneva), including federal, cantonal, and municipal taxes. - Non-residents pay tax only on Swiss-source income. The 35% withholding tax is reduced to the treaty rate (e.g., 15% for UK, 5% for Singapore, 0% for UAE with conditions). The refund process requires filing a claim with the FTA/ESTV. - Partial taxation for qualified participations: If you hold at least 10% of a company's capital or the investment exceeds CHF 1 million, this relief reduces or eliminates double taxation at the corporate level for both residents and non-residents. For more on corporate taxation, see corporate taxes in Switzerland. ## Tax optimization strategies for investors Sophisticated investors use several strategies to minimize dividend tax in Switzerland. These approaches are legal and widely used by corporate and individual investors. ### Tax-efficient distributions: capital contribution principle The Capital Contribution Principle allows Swiss companies to distribute capital contributions (Agio) to shareholders without triggering the 35% withholding tax. This applies to amounts paid by shareholders above the nominal share value (e.g., premiums on share issuance). How it works: 1. A company issues shares with a nominal value of CHF 50 but receives CHF 130 per share (CHF 80 premium) 2. The CHF 80 premium is recorded in a separate "capital contribution reserve" account 3. When the company distributes this reserve to shareholders, no withholding tax applies 4. The distribution is tax-free for Swiss resident shareholders holding shares as private wealth Formal requirements: - Capital contributions must be declared in a separate equity account on the statutory balance sheet - The company must report the reserve to the FTA/ESTV annually within 30 days of shareholder approval (using Form 170) - Only direct contributions from shareholders qualify; indirect or hidden contributions do not Restrictions for listed companies (since 2020): - Must distribute equal amounts of taxable dividends from other reserves - Must reduce capital contribution reserves by at least 50% of liquidation surplus in share buybacks This strategy is particularly useful for companies planning capital-intensive expansions or restructurings, as it allows tax-efficient return of capital to shareholders. For more on structuring, see benefits of a holding company. ### Using pension schemes (Pillar 2, Pillar 3a) Swiss pension products offer significant tax advantages for dividend income. Investments held within Pillar 2 (occupational pension) or Pillar 3a (private pension) accounts grow tax-free, including dividends and interest. No withholding tax applies to income generated inside these pension structures. Key benefits: - Pillar 3a contributions are tax-deductible from taxable income - Investment income (dividends, interest, capital gains) accrues tax-free during the accumulation phase - Withdrawals are taxed separately at favorable progressive rates, but no 35% withholding tax on dividends at source This makes pension accounts highly tax-efficient for long-term equity investments. However, withdrawals are restricted (typically at retirement age or for specific purposes like home purchase), so liquidity is limited. {{cta:cta-1}} ## Future of dividend tax: what to expect in 2025 The Swiss dividend withholding tax system remains unchanged in 2025. No legislative changes to the 35% withholding tax or the refund procedure are expected in the near term. Recent developments: - Notification procedure extension: Starting 1 January 2023, newly issued notification certificates are valid for five years (previously limited to three years). The notification procedure for intra-group dividends was extended in 2023, allowing companies with ≥10% shareholding to report dividends instead of paying withholding tax upfront. The clearance period was extended from 3 to 5 years. - Switzerland-India DTT amendment: From 1 January 2025, the residual dividend withholding rate under the India treaty increases from 5% to 10%. The Switzerland-India DTT was amended in 2024, increasing the residual withholding tax rate from 5% to 10% for Indian parent companies, effective January 1, 2025. ## Official resources and forms The following links provide direct access to official Swiss government resources for dividend withholding tax: - [Swiss Federal Tax Administration (FTA/ESTV) homepage](https://www.estv.admin.ch/estv/en/home/fta.html) - [Withholding tax forms and ePortal](https://www.estv.admin.ch/estv/en/home/fta.html): navigate to "Forms" section - [List of countries with Double Taxation Treaties (DTT)](https://www.estv.admin.ch/estv/en/home/international/international-tax-law/double-taxation-treaties.html) - [Swiss Withholding Tax Act](https://www.admin.ch/opc/de/classified-compilation/19900329/index.html) (Verrechnungssteuergesetz): German/French/Italian

Dividend tax in Switzerland: rates and refund