SWITZERLAND Law and Practice Contributed by: Philippe Nordmann, Marion Bähler, Dario Glauser, Christian Hagen and Samuel Lieberherr, Walder Wyss Ltd
lion. This also applies to capital gains derived from the disposal of a qualifying participation (at least 10%), provided that the minimum holding period of one year is met. In the case of such income from qualified participations, the cor - porate income tax will be reduced by the ratio between the net income from the participation and the aggregate taxable income of the legal entity concerned. Further deductions may be available, such as IP box, R&D super deduction or notional interest Tax resident and non-tax resident legal entities in Switzerland are subject to an annual capital tax at the cantonal and municipal levels. Levied on the tax-adjusted net equity, the applicable tax rates range between approximately 0.001% and 0.53%. The capital tax is creditable to the corporate income tax in some cantons. Stamp Duty A one-time capital duty of 1% is levied on any issuance of new shares by a tax resident com - pany exceeding the amount of CHF1 million (nominal value and share premium, with any issuance up to such amount being tax-free), and on contributions made by the direct share - holder to such company. In both cases, certain reliefs are available for, inter alia, recapitalisation, restructuring and migration. A security transfer tax of 0.15% for Swiss secu - rities and 0.3% for foreign securities applies to any transfer of taxable securities: deduction. Capital Tax • that are transferred against consideration; • where at least one of the parties or interme - diaries involved in the transfer qualifies as a Swiss securities dealer; and
• where none of the available exemptions applies. Stamp duty is further levied in certain special legal cases (eg, on insurance premiums). Value Added Tax (VAT) VAT is levied at a federal level on taxable sup - plies and services made in Switzerland, as well as on the import of goods. Taxable services from abroad are subject to the reverse charge mecha - nism. The standard tax rate is 8.1%. A special tax rate of 3.8% applies to accommodation services (eg, hotels), and a reduced tax rate of 2.6% applies to the charge (and import) of certain elementary supplies such as food, water and medication. Individuals and legal entities providing taxable supplies and services are subject to VAT if such supplies and services exceed CHF100,000 per annum (in certain special cases such as sports associations, the threshold amount is CHF150,000). Withholding Tax (WHT) Dividends in cash or in kind in excess of the nominal share capital plus confirmed capital contribution reserves from a tax resident com - pany are subject to WHT at a rate of 35%, to be withheld by the company and paid to the Swiss Federal Tax Authorities. The WHT is refundable or creditable, in full, to any shareholder who has recognised the distribution in the income state - ment; or reported it in the income tax return based on a DTT or, under certain circumstances, the agreement with the EU regarding internation - al automatic exchange of information. A notifi - cation procedure is available (instead of paying the tax and claiming the refund) under certain conditions.
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