SWITZERLAND Law and Practice Contributed by: Daniel Haeberli and Simone Gloor, Homburger
• The debtor has made a transaction that is being considered as a gift or a disposal of assets without any consideration. Transac- tions in which the debtor received dispropor- tionate consideration may also be avoided. • The following acts are voidable, provided that the debtor was already over-indebted at that time: (a) the granting of security for existing claims, provided that the debtor was not previously obliged to grant such security; (b) the payment of a monetary obligation in any other way than by payment in cash or other customary means of payment; and (c) the payment of a debt not yet due. However, any avoidance action is dismissed if the beneficiary of the transaction can prove that it was not aware of the debtor’s over-indebted- ness and, despite being diligent, could not have known that the debtor had been over-indebted at that time. Moreover, any actions carried out by the debtor in the five years preceding the commencement of formal insolvency proceedings or the confir- mation of a composition agreement with the aim of discriminating between creditors or favouring some creditors over others are voidable if the debtor’s counterparty was aware of such inten- tion.
• cantonal and communal stamp duties. The rates vary depending on the face value of the security and the location of the real estate. The rates for fees vary widely from canton to canton. 8.2 Withholding Tax/Qualifying Lender Concepts The granting of upstream or cross-stream secu- rity on terms other than arm’s length may trigger a 35% dividend withholding tax, which must be deducted from the gross payment made. The dividend withholding tax is fully recoverable if the recipient is a Swiss-resident entity. Non- resident companies with a permanent estab- lishment in Switzerland can claim a full refund if the relevant asset is attributable to the Swiss permanent establishment. Non-resident compa- nies may be eligible for a full or partial refund of the dividend withholding tax, depending on the applicable double tax treaty between their country of residence and Switzerland. If there is no double tax treaty in force, the dividend with- holding tax may become a final burden for the recipient (subject to any measures required in the country of residence of the recipient). In addition, the Swiss Confederation and the cantons or communes levy an interest withhold- ing tax on interest that is secured by a mortgage on Swiss real estate. The combined rate of the tax varies between 13% and 33%, depending on the canton in which the real estate is located. This interest withholding tax is reduced to zero under many double tax treaties, including those with the USA, the UK, Luxembourg, Germany and France. 8.3 Thin-Capitalisation Rules Under Swiss tax law, the tax authorities may refuse to deduct interest on the portion of loans
8. Tax Issues 8.1 Stamp Taxes
If loans are secured by real estate, the following fees may be payable, depending on the trans- action: • notaries’ fees; • registration fees for the land register; and
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