Switzerland: Proposed changes to the Swiss withholding tax system on coupon interest payments
The Swiss Federal Council has taken another step towards changing the Swiss withholding tax law for interest payments on bonds and money market papers.
Currently any withholding tax on securities is deducted at source by the issuer (debtor) and not by the paying agent.
Proposed tax regime:
The proposal intends for a switch from the debtor principle to the paying agent principle.
In light of these changes, it is planned to exempt non-resident investors as well as institutional investors resident in Switzerland from Swiss withholding tax. In addition, Swiss withholding tax for individuals resident in Switzerland would not only become due for Swiss interest payments (current law) but also for interest payments on foreign bonds and money market papers.
For more details please refer to the News Portal of the Swiss Federal Administration:
If approved by the Swiss Parliament, the changes would become effective on 1 January 2017, under the condition that the automatic exchange of information will also have been established with major financial centres.
Note: No change is planned for dividend payments for Swiss companies.
We continue to monitor the Swiss market and will provide more information as it becomes available.
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