What is the 35% Swiss withholding tax and can I get it back?
The 35% Swiss withholding tax is a tax deducted at source from certain Swiss investment income, such as dividends and interest. If you correctly declare this income in your Swiss tax return, the withholding tax is generally credited against your final tax liability or refunded, depending on your circumstances. If the income is not declared, you may lose the right to reclaim the withholding tax.
Dear taxum, I keep seeing a 35% deduction on my Swiss investment income. What is that?
That is the Swiss withholding tax. And the good news is it is not always final.
Switzerland deducts 35% at source on interest and dividends from Swiss investments - before the money reaches you. It is not a penalty. It is a prepayment, designed to discourage undeclared investment income.
If you declare the income correctly in your tax return, the 35% is credited against your actual tax liability. The difference comes back to you.
If you do not declare it, it does not.
I have sat with clients who saw the deduction, assumed the tax was settled, and moved on. The declaration step is not optional. It is the part that makes the system work in your favour.
Thirty-five percent withheld. Declared correctly. A lot of it returned.
That is the mechanism. It just requires the paperwork to close the loop.