Updates on withholding tax and stamp duties (2026)

Withholding tax and stamp duties repeatedly raise challenging questions in practice - particularly with regard to the recognition of capital contribution reserves, non-cash benefits in a group relationship and the tax treatment of fiduciary relationships. Using practical case studies, Thomas Jaussi and Markus Küpfer show which requirements must be met for a tax-free distribution from capital contribution reserves in accordance with Art. 5 para. 1bis of the Swiss Federal Tax Act (VStG), when a refund of turnover tax is possible following a change in FTA practice and how non-cash benefits are to be assessed in the case of an intra-group sale of a shareholding. The solutions provide you with the necessary tools to recognize and correctly assess typical stumbling blocks in withholding tax and stamp duties.

all solutions from this seminar

Thomas Jaussi

Markus Küpfer

Note: This language version is an automatically generated translation. The text may therefore contain linguistic and terminological errors.

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Case 1: Capital contribution reserves; requirements for tax-free distributions under Art. 5(1bis) of the Tax Act

1.1 Facts

Immobilien AG (hereinafter also referred to as the “Company”) is a corporation with its registered office and unlimited tax liability in Canton A. The Company’s primary purpose is the holding and management of commercial buildings in Switzerland. Its share capital amounts to CHF 200,000.00, divided into 1,000 fully paid-up registered shares with a par value of CHF 200.00 each. The fiscal year of Immobilien AG corresponds to the calendar year. All shares of Immobilien AG are held by Mr. Hauser, who is also subject to unlimited tax liability in Canton A. Mr. Hauser holds this investment as part of his private assets.

On September 1, 2020, Mr. Hauser contributed a property that he had held privately until that date to Real Estate AG at fair market value. According to an appraisal prepared by the independent consulting firm GmbH, the fair market value of this property at the time of contribution was CHF 10 million, which is why Real Estate AG recorded this asset at that value in its books. In return, Immobilien AG paid Mr. Hauser a cash compensation of CHF 6 million. The remaining CHF 4 million was recorded by Immobilien AG as “extraordinary income” in consultation with its auditors.

In the 2020 fiscal year, Immobilien AG generated a profit from operating activities of CHF 1 million. In its balance sheet for the 2020 fiscal year, Real Estate AG reported, in addition to general reserves (statutory reserves) of CHF 100,000.00, retained earnings of CHF 5 million, which resulted from ongoing business operations as well as the aforementioned contribution of the property by Mr. Hauser.

On April 14, 2021, the General Meeting of Real Estate AG resolved to forgo the distribution of a dividend for the 2020 fiscal year. At the same time, the entire retained earnings were allocated to general reserves.

In the 2021 fiscal year, Immobilien AG transferred CHF 4 million from the 2020 contribution of the property by Mr. Hauser from general reserves to capital contribution reserves. This transaction was deemed to be in compliance with commercial law by the auditors of Immobilien AG. In addition, the company generated a profit of CHF 1 million from its ongoing business operations.

On April 15, 2022, the General Meeting of Immobilien AG approved the reclassification of general profit reserves to capital contribution reserves in the amount of CHF 4 million for its 2021 fiscal year. It also resolved to distribute an immediately payable dividend of CHF 2 million, which was funded entirely from capital contribution reserves.

For the 2022 fiscal year, Real Estate AG generated a profit from continuing operations of CHF 2 million. On April 14, 2023, the company’s General Meeting resolved to distribute an immediately payable dividend of CHF 1 million. The corresponding resolution on the appropriation of profits by Immobilien AG again stipulated that the dividend distribution would be funded entirely from capital contribution reserves.

Previously—namely on April 10, 2023—Immobilien AG submitted Form 4 to the Federal Tax Administration (FTA), thereby declaring the amount of CHF 4 million as a contribution subject to the issue tax in connection with the transfer of Mr. Hauser’s property in 2020.

Also on April 10, 2023, Real Estate AG reported to the FTA via Form 170 an opening balance of capital contribution reserves as of January 1, 2020, of 0. for contributions, premiums, and grants. As of December 31, 2021, its capital contribution reserves amounted to CHF 4 million.

Consequently, the FTA refused to recognize capital contribution reserves in the total amount of CHF 4 million and determined that Immobilien AG owed a withholding tax of 35%, amounting to CHF 700,000.00, on its dividend distribution due on April 15, 2022. For the dividend distributed as of April 14, 2023, the withholding tax payable amounts to CHF 350,000.00. The FTA thus also did not accept the use of capital contribution reserves for this dividend distribution.

Immobilien AG disagrees with the FTA’s ruling. It maintains that both the dividend distribution for its 2021 fiscal year and for its 2022 fiscal year can be funded from capital contribution reserves, which is why the collection of withholding tax is not permissible.

1.2 Questions

What are the general requirements for the formation of reserves from capital contributions for the purposes of withholding tax?
Is withholding tax due on the dividend distributions of Immobilien AG for the 2021 and 2022 fiscal years?

Case 2: Turnover Tax – Refund Based on a Change in FTA Practice?

2.1 Facts

The facts of the case can be summarized as follows:

In its judgment of November 25, 2024 (9C_168/2023 and 9C_176/2023), the Federal Supreme Court issued a ruling that contradicted the previous practice of the Federal Tax Administration (FTA) regarding turnover tax on employee share plans.
In short, the Federal Supreme Court upheld the appellant’s argument that no turnover tax is due on employee shares (Performance Share Units [PSU] or Restricted Share Units [RSU]) granted to executive employees free of charge, with a subsequent allocation of shares to employees free of charge, due to the absence of consideration.
In 2025, Swiss Holding AG determined that it had declared and paid turnover tax calculated on the market value of employee shares issued to employees free of charge based on PSUs.
In October 2025, Swiss Holding AG filed a request, based on Art. 8 StV, for a refund of the turnover tax paid on the employee shares for the years 2020 through 2025.
In December 2025, the FTA denied the refund on the grounds that Swiss Holding AG had declared and paid the turnover tax without reservation in the years in question in accordance with the FTA’s practice at the time, and therefore a refund was not possible.
For a refund to be granted under Art. 8 StV, the taxpayer must have declared a tax that, according to the legal situation, practice, and case law at the time, was not due.

2.2 Questions

What are the general requirements for a refund of the turnover tax?
How can one argue in the present case?

Case 3: Withholding Tax – Sale of a Stake

3.1 Facts

The facts are as follows:

The domestic company Trade AG trades in rare precious metals.
Its main market is in the Arab region.
Its sister company, Trade Ltd., conducts the same business in the U.S.
In mid-2024, Trade AG establishes a subsidiary in Bahrain, B-Ltd.
B-Ltd. is to build and operate a processing plant for rare precious metals.
B-Ltd. has a share capital of USD 100,000, which has been fully paid in by Trade AG.
At the end of 2024, B-Ltd. reports a loss of USD 50,000; preparatory work for future operations has not yet been undertaken.
Instead, by the end of 2024, the shareholder of Trade AG and Trade Ltd. concluded negotiations with three foreign investors, who are to acquire a stake in B-Ltd. with a share capital of USD 25,000 each and simultaneously contribute a premium of USD 10,000,000 each to B-Ltd.
Trade Ltd. is to hold the remaining 25 percent of B-Ltd.
For this reason, Trade Ltd. will purchase the stake in B-Ltd. from Trade AG in early March 2025, effective January 1, 2025, based on the financial statements as of December 31, 2024, at the nominal value—corresponding to the book value—of USD 100,000, and shortly thereafter sell 25 percent each of B-Ltd. at par value to the three joint venture partners, who, immediately after the share purchase, make the capital contribution of USD 10,000,000 each that was committed at the end of 2024.

3.2 Questions

Can it be assumed that Trade AG established B-Ltd. in a fiduciary capacity on behalf of the future shareholders?
What is the market price or third-party price for the stake in B-Ltd.?
Does Trade AG provide Trade Ltd. with a monetary benefit in light of the three investors’ prior commitments to each contribute a capital contribution of USD 10,000,000?
Does Trade AG provide the three investors with a consideration in kind?

Case 4: River Vessels Held in Trust

4.1 Facts

The facts are as follows:

Schiff GmbH, based in BS, is part of a German tour operator group.
Since 2018, Schiff GmbH has held five river cruise ships in trust for the German Charter-GmbH, a sister company, based on trust agreements. These agreements do not provide for any compensation for Schiff GmbH, e.g., in the form of a trust commission.
The market value per ship is CHF 15,000,000.
The net profit before taxes is CHF 500,000 per ship per year.
The Charter GmbH operates the five vessels, pays all costs, and collects all revenues.
The Charter GmbH also pays all of Schiff GmbH’s bills, such as those for registered office, accounting, tax returns, etc.
Accordingly, the Ship GmbH reports an income statement that consists solely of zero-balance items.
On the balance sheet, the Ship GmbH has a bank account with CHF 20,000 as its sole asset and the paid-in share capital of CHF 20,000 as its sole liability. There is no reference to the fiduciary relationships.
Tax returns are prepared based on these annual financial statements, with Schiff GmbH always indicating that it holds no trust assets.

4.2 Questions

Under what conditions are fiduciary relationships recognized for withholding tax purposes?
Are there monetary benefits in this case, and if so, in what amount?
For which years can withholding tax be levied and a refund claimed if Schiff GmbH initiates contact with the FTA on its own initiative?