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Old 14.03.2021, 18:04
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Tax on dividends paid by Swiss companies

I am a married person working in Zurich and holding C permit.


Last year I have declared owning shares in one of the largest Swiss banks in the Private Tax application and no tax on dividends was due according to the application. This has been further confirmed in the final bill from the Tax Office.


This year I have imported the previous year data into the online Private Tax application. Dividend tax has been automatically calculated on the exact same shares I held in previous years. The dividends were paid out in two installments in 2020 and both of them have been taxed. There is no option for me to change this manually.


Have there been any changes in dividend tax since last year?
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  #2  
Old 14.03.2021, 18:14
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Re: Tax on dividends paid by Swiss companies

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I am a married person working in Zurich and holding C permit.


Last year I have declared owning shares in one of the largest Swiss banks in the Private Tax application and no tax on dividends was due according to the application. This has been further confirmed in the final bill from the Tax Office.


This year I have imported the previous year data into the online Private Tax application. Dividend tax has been automatically calculated on the exact same shares I held in previous years. The dividends were paid out in two installments in 2020 and both of them have been taxed. There is no option for me to change this manually.


Have there been any changes in dividend tax since last year?
I am not an expert but I thought dividends were always taxed in Switzerland
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  #3  
Old 14.03.2021, 18:19
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Re: Tax on dividends paid by Swiss companies

Ausschüttungen aus Kapitalreserven are tax free. These look like dividends but tax-technically are not.
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Old 14.03.2021, 18:22
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Re: Tax on dividends paid by Swiss companies

Dividends are always taxed. In BL though there's a reduced payment as part of it can be considered a capital payment for tax purposes. No, I don't understand it.

The software I used to do my taxes requires me to enter in all dividends received. Sometimes it can extract the relevant information from its own database, othertimes not and I must do it manually.

I suspect the OP didn't do this and so they did it for him/her.
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Old 14.03.2021, 18:23
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Re: Tax on dividends paid by Swiss companies

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I am not an expert but I thought dividends were always taxed in Switzerland

My understanding was that I have not had to pay taxes on dividend paid by Swiss companies as this dividend is paid out of profit which has already been taxed in Switzerland.



I have not paid any taxes on dividends from these exact shares in 2019 and this has been allowed by the Tax Office as they issued the final bill for 2019 and they do not require me to make any corrections.
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Old 14.03.2021, 18:27
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Re: Tax on dividends paid by Swiss companies

In the section with name of the company, ISIN etc. it says:


26.03.2018 [Rückkauf eigener Aktien (Y)]Rückzahlung aus Reserven aus Kapitaleinlagen KEP CHF 0.34


So it looks like they pay out of its own capital reserves but the online Private Tax ZH application still marks it as taxable (VSt. mit).
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Old 14.03.2021, 18:28
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Re: Tax on dividends paid by Swiss companies

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My understanding was that I have not had to pay taxes on dividend paid by Swiss companies as this dividend is paid out of profit which has already been taxed in Switzerland.
No that's not it. Dividends are always paid out of profits after they were hit by corporate taxes. You're always double taxed there, both in Switzerland and elsewhere.


Your "dividend" was most likely not a dividend but "Ausschüttungen aus Kapitalreserven" that I mentioned, that's why.


Name the company so we can look up the specifics on ictax for it.
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Old 14.03.2021, 18:30
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Re: Tax on dividends paid by Swiss companies

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Dividends are always taxed. In BL though there's a reduced payment as part of it can be considered a capital payment for tax purposes. No, I don't understand it.

The software I used to do my taxes requires me to enter in all dividends received. Sometimes it can extract the relevant information from its own database, othertimes not and I must do it manually.

I suspect the OP didn't do this and so they did it for him/her.

Last year I put the ISIN into the application and it extracted all information including:

26.03.2018 [Rückkauf eigener Aktien (Y)]Rückzahlung aus Reserven aus Kapitaleinlagen KEP CHF 0.34


No additional tax was added in the final bill.
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Old 14.03.2021, 18:33
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Re: Tax on dividends paid by Swiss companies

UBS Group AG
ISIN: CH 024 476 758 5
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Old 14.03.2021, 18:38
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Re: Tax on dividends paid by Swiss companies

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UBS Group AG
ISIN: CH 024 476 758 5

ICTAX (https://www.ictax.admin.ch/extern/de...76758/20181231) says there were 0.65 CHF per share of KEP/Rückzahlung Kapitaleinlagen, that's exactly that tax free event I was talking about. It is not a regular dividend, that's why you don't owe tax on it.
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Old 14.03.2021, 18:42
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Re: Tax on dividends paid by Swiss companies

Thanks, this is very useful. However, in the ZHprivateTax (online application) it is not possible to change it. The dropdown list VSt. (mit/ohne) does not open. It is set to mit without possibility of changing it. How do I work around it? The PDF generated by this application shows these dividends as taxable income. Is it enough if I just add a remark about this bug?
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Old 14.03.2021, 18:43
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Re: Tax on dividends paid by Swiss companies

VSt. is Verrechnungssteuer, the 35% swiss withholding tax - did you broker deduct that on this payout? They shouldn't have.
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Old 14.03.2021, 18:46
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Re: Tax on dividends paid by Swiss companies

They didn't.
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Old 14.03.2021, 18:50
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Re: Tax on dividends paid by Swiss companies

Then it's VSt ohne and you shouldn't change that.


Also, isn't it a little too late to be doing 2018 taxes? It's 2021 and you should be doing your 2020 taxes.
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Old 14.03.2021, 18:54
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Re: Tax on dividends paid by Swiss companies

The problem is that in the application it is set automatically to VSt mit and cannot be changed.

I'm doing 2020 taxes but this

26.03.2018 [Rückkauf eigener Aktien (Y)]Rückzahlung aus Reserven aus Kapitaleinlagen KEP CHF 0.34

is also pulled in automatically.
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Old 15.03.2021, 20:28
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Re: Tax on dividends paid by Swiss companies

Call the tax office.
It looks like this is due to the share buyback program UBS started in 2018 that lasted 3 years and was concluded recently (this year), buying back ~4% of the outstanding shares. Those 0.34 are probably the proportional amount per stock still issued they bought for during 2020.
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Old 16.03.2021, 09:28
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Re: Tax on dividends paid by Swiss companies

If you check UBS website (https://www.ubs.com/global/en/invest...d/history.html) it shows that the 2019 dividend (paid in 2020) was different from the previous years and is partially subject to the 35% withholding tax in Switzerland.
In previous years, this was not the case.

The 2020 dividend (to be paid out this year) will be the same as the 2019 one - half of it subject to the withholding tax.
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