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Marcus Küpfer

Thomas Jaussi

Update on withholding tax and stamp duties


Workshop by Markus Küpfer and Thomas Jaussi on the occasion of the ISIS) seminar on 14/15 and 21/22 June 2021 entitled "Corporate Tax Law 2021".

The complete PDF of the seminar folder can be downloaded for CHF
The corresponding case solutions can be purchased for CHF
(introductory price)
can be purchased in the shop.
The workshops are also available individually in the "Documents" section.
The case solutions and other documents can be obtained free of charge in the shop.

Case 1: Refund of withholding tax in international circumstances


X AG has its registered office in the Canton of Zurich and its purpose is to trade in garden furniture and corresponding accessories in particular. Thanks to the good business performance, X AG distributed dividends in the amount of CHF 750,000.00 in each of the 2014 and 2015 financial years. X AG declared the withholding tax owed on these dividends in the amount of CHF 262,500 each using form 103 and paid it to the Federal Tax Administration (FTA).

Mr Wiener is an Austrian citizen resident in Vienna/Austria and on 10 September 2016 applied to the competent Austrian tax office for a refund of withholding tax on the dividends distributed by X AG in the 2014 and 2015 financial years using form 84. The competent tax office submitted the application to the FTA on 15 November 2016.

Extensive clarifications of the facts by the FTA brought the following to light:

According to his own statements, Mr Wiener is the founder and sole beneficiary of the Liechtenstein Y Foundation. Based on a corresponding "letter of wishes", he has full power of disposal over the corresponding foundation assets. The Y Foundation is the sole owner of the finance company P Holding Inc. domiciled in Panama (hereinafter: P Holding Inc.). For its part, P Holding Inc. holds 100 per cent of the participation rights of UCI Ltd. with registered office in Road Town, British Virgin Islands (hereinafter: UCI Ltd.). Finally, UCI Ltd. is the sole owner of the aforementioned X AG, which distributed the income subject to withholding tax in the present case. On the basis of this construct, Mr Wiener is of the opinion that he is the full beneficial owner of the equity securities of X AG and is therefore also entitled to a refund of the withholding tax.

The shares of X AG are held in a securities account in the name of P Holding Inc. The dividend income under discussion also flowed from X AG to P Holding Inc. However, Mr Wiener was unable to provide legally sufficient proof that P Holding Inc. had actually forwarded the dividends to the Y Foundation or even to Mr Wiener personally. Thus - in the opinion of the FTA - Mr Wiener cannot be regarded as the recipient of the present dividends under Swiss law. Moreover, neither P Holding Inc. nor UCI Ltd. were to be considered transparent under the Agreement of 30 January 1974 between the Swiss Confederation and the Republic of Austria for the Avoidance of Double Taxation in the Field of Taxes on Income and on Capital (DTA CH-AT; SR 0.672.916.31).

Mr Wiener justifies his entitlement to reimbursement, in addition to his economic right to use the dividends in question on the basis of the chosen construct, in particular with the fact that the dividend distributions in dispute were attributed to him personally by the Austrian tax authorities in the context of an after-tax procedure for the purposes of Austrian income taxes. Through this attribution, the Austrian tax authorities considered the intermediary companies (i.e. P Holding Inc., UCI Ltd. and the Y Foundation) to be transparent. In the present case, the Swiss tax authorities were also bound by this assessment of the Austrian tax authorities. For this reason too, the withholding tax should be refunded to Mr Wiener in accordance with the application.


  • Is Mr Wiener entitled to a refund of the withholding tax on the dividends of X AG for the financial years 2014 and 2015?
  • What is the appeal procedure if Mr Wiener does not agree with the FTA's decision?

Case 2a: Turnover tax


Muster AG is the treasury centre of an international listed group headquartered in the USA. Muster AG had a participation with a book value of more than CHF 10'000'000 and has subscribed to bonds of the top group companies in the group securitisation programme and returned them for redemption. The following key figures exist with regard to the sales levy:

  • With effect from 1 January 2012, Muster AG was subsequently registered as a domestic securities dealer within the meaning of Art. 13 para. 3 let. d StG.
  • In 2014, the investment held by Muster AG was sold within the Group.
  • At the end of 2015, the securitisation programme expired, which is why the sample no longer held any bonds. The portfolio of taxable deeds as at 31 December 2015 was CHF 0.
  • In November and December 2016, Muster AG subscribed to foreign money market funds in the amount of approximately CHF 2 billion and returned them for redemption. The portfolio of taxable certificates as at 31 December 2016 was CHF 0.
  • The same happened in February and March 2017; the stock of taxable deeds as at 31 December 2017 was and remained CHF 0 until after 31 December 2018.
  • Muster AG never deregistered with the FTA as a securities dealer within the meaning of Art. 13 para. 3 let. d StG.
  • On the occasion of a turnover tax audit in spring 2019, the FTA claimed the turnover tax on the money market funds transactions of the years 2016 and 2017 and - due to the lack of taxable documents as of 31 December 2018 - de-registered Muster AG as a domestic securities dealer as of the current audit date.
  • In the fourth quarter of 2019, Muster AG purchased an investment in the amount of CHF 100 million from a foreign third party.


  • When should the Muster AG be registered and de-registered?
  • What are the consequences under turnover tax law in this case?

Case 2b: Turnover tax


Muster AG was founded in 2017 and in the same year purchased a domestic participation from a domestic natural person from his private assets for CHF 11,000,000. In 2019, Muster AG sold ten per cent of the participation for CHF 1,100,000 to a domestic natural person in his private assets. In December 2020, Muster AG purchased a foreign participation for CHF 15,000,000 from a foreign natural person. In January 2021, Muster AG settles the turnover tax of CHF 45,000 on the December 2020 transaction using Form 9. In February 2021, the FTA is notified because Muster AG is not registered with it as a domestic securities dealer.


  • When should the Muster AG be registered and de-registered?
  • What are the consequences under turnover tax law in this case?

Case 3: Withholding tax - hidden equity capital


The Muster Group is an internationally active corporation. The Swiss Muster Holding AG is the TopCo. It directly holds Muster Schweiz AG, an operating group company. In 2016, Muster Schweiz AG received an open-ended loan in the amount of CHF 5,000,000, interest-bearing at two per cent, from Muster Holding AG. In 2018, the domestic company Muster Handels AG, a sister company of Muster Schweiz AG, also granted the latter an open-ended loan of CHF 5,000,000 at two percent. Due to the Covid 19 crisis, Muster Finanz AG, Principality of Liechtenstein, also a sister company of Muster Schweiz AG, granted it a subordinated perpetual loan of CHF 10,000,000 at an interest rate of five per cent. All interest rates qualify as corresponding to the third party settlement.

In the present case, it is assumed - as a school example and detached from reality - that according to calculations based on KS No. 6 CHF 15,000,000 minimum equity capital is required and consequently a maximum of CHF 35,000,000 debt capital is permissible. Based on the balance sheet of Muster Schweiz AG as of 31 December 2020, CHF 10,000,000 thus qualify as hidden equity for the first time. In addition, it is assumed that the interest paid on hidden equity capital constitutes a payment in kind in its entirety.


  • How is the assessment basis calculated for hidden equity?
  • How is the relevant taxable beneficiary determined in the case of hidden equity?

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