Workshop by Slavica Loeb-Lazarevic and Laetitia Fracheboud on the occasion of the ISIS) seminar on May 05, 2025 entitled "Everyday and special issues in the withholding tax procedure"
Note: This language version is an automatically generated translation. The text may therefore contain linguistic and terminological errors.
view in original language (German)Olympia AG is a company based in Switzerland. Its primary purpose is the provision of financial services. According to the share register, Mr. N owns 990 shares in the company, and Mr. O owns 10. Mr. N is a member of the company’s board of directors with sole signing authority.
Between 2016 and 2018, the company paid various invoices that turned out to be personal expenses for Mr. N.
Olympia AG submitted its 2016 financial statements to the FTA on October 17, 2017, its 2017 financial statements at the end of September 2018, and its 2018 financial statements in July 2019, in each case without declaring any monetary benefit.
The FTA conducted an audit of Olympia AG in July 2020. The company did not respond to requests for numerous missing documents.
Based on the results of the audit, there was strong suspicion that Olympia AG had provided monetary benefits. Consequently, the FTA-ASU initiated a criminal investigation against Mr. N to fully clarify the facts of the case. During this proceeding, Olympia AG, as an informant, submitted various additional documents. The FTA-ASU prepared a final report, served it on the accused, Mr. N, and granted him access to the available files.
On December 15, 2021, the FTA notified Olympia AG that this letter interrupted the statute of limitations for any taxable benefits provided in the 2016 fiscal year. On December 9, 2022, a similar letter was sent for the year 2017, and likewise on December 12, 2023, for the 2018 fiscal year.
In July 2024, the FTA issued an invoice to Olympia AG and Mr. N regarding withholding tax on the monetary benefits provided in the 2016–2018 fiscal years. Mr. N was held jointly and severally liable pursuant to Article 12 of the Administrative Offenses Act (VStrR).
On October 20, 2024, the FTA issued its corresponding (initial) decision. Prior to the decision, the FTA gave Olympia AG the opportunity to comment on the determined amount of the monetary benefit. Olympia AG subsequently submitted various, but incomplete, supporting documents. Without informing Olympia AG, the FTA included documents it had received as part of information provided by one of the company’s officers acting as an informant in the administrative criminal proceedings against Mr. N.
Olympia AG and Mr. N filed an objection to this decision in November 2024 with the following motions and points:
The American Jet Group holds, among other things, a stake in Jet Switzerland AG, Zug, through an American subsidiary, Jet Europe LLC.
In March 2025, Jet Europe LLC grants Jet Switzerland AG a credit line of up to USD 50 million. In accordance with the transfer pricing policy applicable to the entire group, the loan agreement stipulates that the loan is to bear interest at a rate of SARON + 4.25%. The interest is capitalized annually and is payable upon repayment of the loan.
In March 2026, the Group finalizes the financial statements of Jet Switzerland AG in accordance with the Swiss Code of Obligations (OR) and determines that, as of December 31, 2025, the company had hidden equity and had partially recorded interest expense against hidden equity.
On April 25, 2026, the Annual General Meeting of Jet Switzerland AG takes place, at which the financial statements (including interest expense) are approved.
In the initial scenario, the credit line is not granted by Jet Europe LLC but by an independent foreign credit institution. The U.S. parent company, JetCo Ltd., provides a guarantee to the credit institution for the credit line.
At its extraordinary general meeting on November 15, 2017, NoName GmbH resolved to pay an extraordinary dividend totaling CHF 5 million, due on the same day. At the time the dividend was due, #AG held a 10% stake in NoName GmbH.
On November 29, 2017, NoName GmbH reported the dividend using Form 110 of the FTA and simultaneously submitted a request for notification using Form 106, which the FTA rejected in a letter dated February 15, 2018, because #AG did not meet the
(then) required 20% ownership threshold. NoName GmbH subsequently remitted the withholding tax owed on this portion to the ESTV. The associated late payment interest was also paid.
On May 19, 2021, the FTA received an application from #AG on Form 25 requesting a refund of the withholding tax paid on the extraordinary dividend of November 15, 2017. In the application, #AG stated that the withholding tax refund should be granted on an exceptional basis despite the “statute of limitations” and that it was aware that this constituted a failure on the part of #AG. In a letter dated June 1, 2021, the FTA informed #AG that its claim for a refund of withholding tax had been forfeited due to the late filing of the application. In a subsequent letter, both companies complained that the application at the time to register NoName GmbH had been wrongfully rejected.
On February 13, 2023, the FTA issued a decision in which it confirmed its view regarding the forfeiture of the right to a refund. In a separate decision, it also ruled that the registration procedure (within the group) had been rightly rejected and that the withholding tax had therefore been rightly paid. On March 14, 2023, both companies filed an objection against the (initial) decisions.
On May 13, 2025, Weiland AG, Zurich, enters into a share purchase agreement with Rossi II BV, Amsterdam, regarding 100% of the shares in Koch AG, Baden. Rossi II BV is a wholly-owned personal holding company established specifically for this purpose by Fabio Rossi, who resides in Italy and benefits there from the "Imposta forfettaria" (the equivalent of Swiss taxation based on expenditure).
The purchase price for the shares is CHF 65 million and takes into account, among other things, that Koch AG will distribute its 2024 profit of CHF 10 million to Weiland AG following the completion of the share purchase agreement.
On June 12, 2025 (alternative: June 30, 2025), the Annual General Meeting of Koch AG approves a dividend of CHF 10 million, payable on July 1, 2025, based on the financial statements for the fiscal year ending December 31, 2024. In accordance with the contractual agreement, the dividend will be distributed in full to Weiland AG.
On June 14, 2025, the share purchase agreement is executed. With regard to future dividends, Rossi II BV submits a ruling request to the FTA regarding its entitlement to a refund of withholding tax.
On October 18, 2025, Rossi II BV, as the new sole shareholder of Koch AG, resolves to pay an interim dividend from current profits since January 1, 2025, in the amount of CHF 5.5 million. Koch AG reports the dividend to the FTA on October 30, October 2025 using Forms 103 and 108. At this point, Rossi II BV has not yet submitted an application on Form 823B.
Mr. and Mrs. Smith have lived in Meggen (LU) since 2018 and are taxed there on an actual expense basis. Since taking up residence, the couple has owned two properties in Meggen through a real estate company, ImmoSmith GmbH: a luxurious villa with a small private beach and a hillside terrace apartment with a view of the lake and the mountains.
ImmoSmith rents the villa to the couple at the tax-assessed imputed rental value. ImmoSmith rents the terrace apartment at a preferential rate below the tax-assessed imputed rental value to the son of a couple they are friends with, who is studying in Lucerne.
In the control calculation for their tax return, the Smiths declare seven times the imputed rental value of the villa as the minimum assessment basis or control figure. Since ImmoSmith does not distribute dividends, the Smiths do not declare any (additional) income from Swiss assets.
In 2024, the tax administration of the Canton of Lucerne initiates a back-tax procedure for the 2019 and 2020 tax periods, which have already been definitively assessed, and calculates a hidden profit distribution by ImmoSmith for the 2021 and 2022 tax periods, which have not yet been assessed, in the amount of the difference between the market rent and the rent charged for the terrace.
The tax returns for the years 2023 and 2024 had not yet been filed at that time.
Mr. and Mrs. Smith are unaware of whether or when the Lucerne Cantonal Tax Administration will report the matter to the FTA.
