Workshop by Oliver Oppliger on the occasion of the ISIS) seminar on October 21, 2024 entitled "Restitution in international relations - current practice and problem areas"
Note: This language version is an automatically generated translation. The text may therefore contain linguistic and terminological errors.
view in original language (German)Mr. X, a resident of Germany with unlimited tax liability, established the Y Foundation in 2010, a family foundation based in the Principality of Liechtenstein. Upon establishing the foundation, Mr. X transferred a 100% stake in SwissCo—a corporation with its registered office and actual management in Switzerland, which he had previously held as part of his private assets—to the Y Foundation.
The Y Foundation is subject to ordinary income tax in the Principality of Liechtenstein (and thus not taxed as a private asset structure). During his lifetime, Mr. X is the sole beneficiary of the Y Foundation and a member of the Board of Trustees. Under the articles of association, he also has the right to dissolve the Y Foundation at any time and to reclaim the foundation’s assets for himself.
In March 2024, the General Meeting of SwissCo resolves to distribute a dividend of CHF 100,000, payable on April 15, 2024. On April 1, 2024, SwissCo reports the dividend to the FTA using Form 103 and, by simultaneously submitting the application on Form 823B, requests the reporting procedure for the dividend to the Y Foundation.
Questions
X Holding AG, with its registered office and unlimited tax liability in Germany, sold its previously directly held 100% stake in SwissCo—a corporation with its registered office and actual management in Switzerland—at fair market value in exchange for a loan to its subsidiary Y AG, with its registered office and unlimited tax liability in Germany, on January 1, 2022.
The loan agreement concluded between X Holding AG and Y AG stipulates that Y AG must pay X Holding AG, as of December 31 of each year, interest in the amount of the gross dividend(s) declared by SwissCo in the corresponding calendar year.
On June 1, 2023, SwissCo declares a gross dividend of CHF 100,000 in favor of Y AG. On December 31, 2023, Y AG pays X Holding AG interest of CHF 100,000 in accordance with the agreement.
Mr. X, a natural person residing in Monaco, contributes his previously directly held 100% stake in SwissCo—a corporation with its registered office and actual management in Switzerland—to Y SA, a corporation with its registered office and unlimited tax liability in France, as of January 1, 2023, via a contribution in kind at a fair market value of CHF 1 million.
The corporate purpose of Y SA is to hold and manage equity interests. It is not subject to any contractual obligation to pass on dividends from SwissCo. Aside from its interest in SwissCo, Y SA holds no other equity interests. Its equity ratio is 100%.
At the time of the contribution to Y SA, SwissCo has funds in the amount of CHF 200,000 that are distributable under commercial law and not required for operations.
On April 15, 2024, SwissCo distributes a gross dividend of CHF 100,000 to Y SA and applies, using Form 823B, for the application of the reporting procedure based on DTA-F.
As part of an intra-group restructuring, X Ltd., a corporation domiciled in the Cayman Islands, transfers a previously directly held 100% stake in the domestic HoldCo to Y NV, a corporation domiciled in the Netherlands and subject to unlimited tax liability there, effective March 31, 2024.
Subject to the existing reserves, Y NV meets all the requirements for a full exemption from withholding tax under Article 10(3)(a) of the DTA-NL.
HoldCo’s assets also include an 80% stake in the domestic OpCo.
HoldCo’s (simplified) financial statements as of December 31, 2023, show the following figures:
OpCo’s (simplified) financial statements as of December 31, 2023, are as follows:
