In its media release of 18 August 2021, the WAK of the National Council provided information on the withholding tax reform bill.
The reform provides for the extensive abolition of withholding tax on interest income and the abolition of the turnover tax on Swiss bonds in order to strengthen Switzerland as a business location and financial centre. The Commission supports this thrust in essence and makes the following changes to the Federal Council's proposal:
- Abolition of withholding tax on interest on bonds held indirectly via a Swiss investment fund, provided that this interest income is reported separately;
- no collection of the withholding tax claim or refusal to refund the withholding tax solely on the basis of formal deficiencies, provided that non-compliance with a formal requirement does not result in a loss of tax revenue for the Confederation;
- Abolition of the turnover tax not only on Swiss bonds, but also on foreign bonds with a residual term of no more than twelve months.
In addition, the Commission had to decide on two proposals aimed at strengthening the safeguarding purpose of the withholding tax and demanded that the bill be referred back to the Federal Council. The first proposal provided for the introduction of the paying agent system for bonds directly held by natural persons in Switzerland as well as an optional reporting procedure and was rejected because of the complicated implementation. The second proposal intended to replace the withholding tax with a reporting obligation, which was rejected in particular due to the lack of majority support. The National Council will discuss the dossier in the autumn session of 2021.
The full media release is available here.
