The Federal Council wants to strengthen Switzerland as a location for the debt capital market and for group financing activities in all sectors.
To this end, at its meeting on 14 April 2021, it adopted the dispatch on the Federal Withholding Tax Act (strengthening the debt capital market). At the same time, it opened the consultation on the extension of the reporting procedure within the group for withholding tax.
The reform provides for the abolition of withholding tax on domestic interest without replacement. This does not apply to interest on customer deposits with domestic natural persons. With the reform, it can be assumed that the issuance of bonds, which has so far been carried out abroad, will increasingly take place from Switzerland in the future. This may strengthen the Swiss debt capital market. The abolition of withholding tax on interest also creates an incentive to carry out more intra-group financing activities in Switzerland. Overall, the reform strengthens the debt capital market and will trigger value creation and employment impulses in Switzerland in the medium and long term. In addition, the Federal Council is abolishing the turnover tax on domestic bonds. This will make it more attractive to acquire domestic bonds via a domestic securities dealer.
The notification procedure within the group for withholding tax is to be extended. It can now be used for shareholdings of 10 percent or more. The approval procedure will also be simplified administratively. This has virtually no financial impact and no appreciable effect on tax security. The companies receive a liquidity advantage at the expense of a liquidity disadvantage at the federal level. However, this is negligible in today's interest rate environment.
The media release as well as all documents and further information are available here.
