Switzerland: Interest imposed on late notification of dividends, withholding tax

Switzerland: Notification of dividends, withholding tax

The "smaller chamber" of the Swiss parliament voted 20 September 2016 to amend the withholding tax rules. The vote has implications for taxpayers facing possible assessments of substantial payments of interest due to late notifications of dividends. The pending legislation would provide that a failure of late notification of dividends would not trigger interest, but would only trigger the imposition of a penalty.

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The vote of the smaller chamber comes after three years' deliberations, and is in agreement with a vote of the "larger chamber" to give retrospective effect to the changes to the withholding tax provisions. 

What's next?

A final vote of the entire Swiss parliament is the next step. Some view this final vote as a mere formality. Theoretically, a referendum could be possible, but tax professionals expect this appears to be unlikely for the time being.

Therefore, all pending cases going back to 2011 and earlier could be resolved as soon as the amendment to the Swiss withholding tax measures is effective—possibly within the next few months.


In the autumn 2011, the Federal Supreme Court decided a case in connection with the application of the withholding tax notification procedure and its consequences when there was a late filing. Relying on that decision, the Swiss tax authorities took a rigid position with respect to the notification procedure on dividends for withholding tax purposes—regardless whether the taxpayer had satisfied all conditions for applying the notification procedure or not. 

Prior to autumn 2011, the tax administration had accepted late notifications. Afterwards, among the request of the tax authorities was interest at a rate of 5% for late notifications, even when no taxes were in fact due. 


Read a September 2016 blog report prepared by the KPMG member firm in Switzerland: Swiss withholding tax: Correction of mal practice for interest for late notifications

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