In a communication dated July 19, 2022, the Federal Tax Administration (FTA) informs about the following effects of the Federal Law on the Implementation of International Agreements in the Tax Field (StADG), which entered into force on January 1, 2022, on the practice of the FTA in the field of withholding tax in the case of a secondary adjustment:
- The new Art. 18(4) StADG confirms the long-standing practice of the FTA, which provides that withholding tax is not to be levied if a secondary adjustment is made in accordance with the outcome of a mutual agreement procedure.
- Now, with the entry into force of the StADG, it is possible in clear cases to carry out a domestic correction of the previous taxation without having to carry out an (intergovernmental) mutual agreement procedure for this purpose. For this purpose, a so-called domestic agreement based on Art. 16 StADG must be concluded between the competent tax authority and the State Secretariat for International Financial Matters (SIF). The starting point for such an agreement is always the request of the taxpayer to initiate a mutual agreement procedure pursuant to Art. 5 StADG. If the competent tax authority and the SIF agree beyond doubt during the examination of the request that a correction must be made in Switzerland, they can conclude a domestic agreement and submit it to the taxpayer concerned for approval. This makes the intergovernmental mutual agreement procedure superfluous. Since the domestic agreement is equivalent to an (intergovernmental) mutual agreement, secondary adjustments made on the basis of a domestic agreement are also not subject to withholding tax on the basis of Art. 18 (4) StADG.
- The request to initiate a mutual agreement procedure must still be submitted to the SIF by the taxable person.
The FTA's notice is available here .
