Holding Company Matrix by Jurisdiction - Switzerland
| Switzerland | |
|
Corporate income tax rate (effective) for holding companies (Federal, state, cantonal tax etc.) |
For holding companies with special tax status: 7.83% on income, other than qualifying dividends and capital gains. Possible "other income", i.e. interest and royalty income, up to 1/3 of the total income. |
| CFC rules | No CFC rules |
| Treatment of domestic/foreign dividends |
Participation relief, if > holding of at least 10% of the domestic / foreign corporation's equity or > fair market value of the participation is at least CHF 1m
No subject to tax clause |
| WHT on dividends |
Ordinary rate: 35% for dividends from a Swiss entity Reduced to zero percent under the EU Saving Tax Agreement, if the EU parent company holds at least 25% of share capital in the Swiss company for at least 2 years and both companies are subject to CIT. Reduced under double tax treaties if the respective conditions are fulfilled. |
| Treatment of capital gains resulting from the disposal of domestic/foreign shares | Participation relief if holding of at least 10% of the domestic / foreign corporation's equity and if holding period of at least 1 year |
| WHT on interest payments | No WHT on interest deriving from regular loan agreements. |
| WHT on royalty payments | No WHT |
| Thin capitalization rules and debt-to-equity ratio | Thin cap rules published by the FTA in a circular letter (applicable for operating companies); 6:1 safe haven for finance companies |
| Deductibility of interest expenses / limitation of interest deduction |
Deductible
Interest rates may not exceed arm's length rates (FTA publishes safe haven rates periodically). |
| Advance ruling regime and timing |
Yes, advance rulings are given by the respective tax authority (FTA and / or cantonal tax authorities) Timing of ruling approx. 4-8 weeks (depending on work load) |
| Treaty network |
Switzerland has a broad treaty network with currently 84 tax treaties, e.g.:
- China (10% on dividends) |
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