Withholding tax in Swizerland

When is withholding tax levied in Switzerland? How high are these taxes?

Hi there,

Withholding taxes are put in place to guarantee that money is set aside for taxes.

In Switzerland, federal withholding taxes are deducted from capital gains, interest earned on securities and bond yields (35% witholding tax). They are also deducted from lottery winnings (35% withholding tax), pensions and annuities (15% withholding tax) and insurance benefits (8% witholding tax).

A withholding tax known as the "tax at source" is deducted directly from the salaries on temporary residents employed in Switzerland.

After you file your tax returns, part of the money deducted as withholding tax may be reimbursed if the amount withheld is higher than the amount you owe in taxes.

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I have a question about withholding tax on interest and dividends. I have a euro fixed deposit account in an EU country on which I earn a fairly high interest rate. The problem is that the bank deducts the withholding tax (around 20%) from my interest. How can I claim this withholding tax back? I do not live in that country, so I can't imagine I would have to pay taxes there. Any info would be appreciated.

Hi there,

Switzerland has bilateral tax agreements with many countries, including all EU member countries. Individual tax agreements vary, but typically allow you to reclaim a portion of withholding tax on interest or dividends from the Swiss Federal Tax Administration.

You can only reclaim the portion of withholding taxes which would be due if the interest or dividends had been earned in Switzerland. If the withholding tax in the country in which yields are earned is higher than that of Switzerland, you will not be able to reclaim the difference between the Swiss and foreign tax rate.

In order to reclaim withholding tax from the Federal Tax Administration, you will have to complete and submit the forms R/CH - I/2 (interest) or R/CH - I/1a (dividends).

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