Anticipatory tax (Verrechnungssteuer) is a federal tax withheld at source on certain capital income, primarily dividends and interest. At a rate of 35%, it is one of the highest taxes in Switzerland. However, it is designed as a guarantee tax: for beneficiaries who correctly declare their income, it is fully refundable.
This guide explains how anticipatory tax works, the income concerned, the distributing company's obligations and the refund procedure.
Operating principle
Anticipatory tax works in three steps:
- Withholding at source: the company distributing the income (dividend, interest) withholds 35% of the gross amount
- Payment to the FTA: the company remits the withheld anticipatory tax to the Federal Tax Administration (FTA)
- Refund to the beneficiary: the beneficiary who correctly declares the income in their tax return obtains the full refund of the anticipatory tax
This mechanism incentivises taxpayers to declare their capital income. If the income is not declared, the 35% anticipatory tax becomes definitive, representing a very heavy penalty.
Income subject to anticipatory tax
| Type of income | Rate | Application threshold |
|---|---|---|
| Dividends (corporation, LLC) | 35% | No threshold (from the first franc) |
| Bank deposit interest | 35% | Above CHF 200/year per account |
| Bond interest | 35% | No threshold |
| Lottery winnings | 35% | Above CHF 1,000,000 |
| Insurance benefits | 15% | Life annuities, policy surrenders |
| Liquidation distributions | 35% | Portion exceeding nominal value |
Obligations of the distributing company
In the case of dividend distribution
When an LLC or corporation distributes a dividend, the company has the following obligations:
- General meeting resolution: the dividend must be approved by the AGM (minutes required)
- Declaration to the FTA (Form 103): within 30 days of the AGM resolution
- 35% withholding: the company withholds 35% of the gross dividend and pays only 65% to the beneficiary
- Payment to the FTA: within 30 days of the dividend due date
Practical example
The AGM of an LLC decides to distribute CHF 50,000 as a dividend:
| Item | Amount (CHF) |
|---|---|
| Gross dividend decided by the AGM | 50,000 |
| Anticipatory tax withheld (35%) | -17,500 |
| Net dividend paid to the shareholder | 32,500 |
| Anticipatory tax remitted to the FTA by the company | 17,500 |
The shareholder will recover the CHF 17,500 upon their next tax assessment, provided they declare the dividend in their tax return.
Refund of anticipatory tax
For natural persons residing in Switzerland
The refund is automatic if the income is correctly declared in the annual tax return. The anticipatory tax is offset against cantonal and federal tax owed or refunded if the amount exceeds the tax due.
Deadline: the refund claim must be made within 3 years of the end of the calendar year in which the benefit became due.
For legal entities domiciled in Switzerland
Capital companies request the refund via Form 25 submitted to the FTA. The conditions:
- The company is domiciled in Switzerland
- The income is correctly recorded in the accounts
- The company has beneficial ownership of the rights (effective beneficiary)
- The claim is made within the 3-year deadline
For beneficiaries residing abroad
Foreign beneficiaries can obtain a partial refund under double taxation conventions (DTC). The residual rate varies according to the applicable convention (generally between 0% and 15%).
Example with the Switzerland-France DTC: the residual rate is 15% for dividends (France thus refunds 20 points out of the 35 withheld).
Risk of definitive loss
The anticipatory tax is definitively lost in the following cases:
- Non-declaration: the income is not declared in the tax return
- Late declaration: the 3-year deadline has passed
- Tax evasion: in cases of proven tax evasion, the right to refund may be refused
Warning: The loss of the right to refund of anticipatory tax is a severe penalty. For a dividend of CHF 100,000, this represents a net loss of CHF 35,000. Systematically declaring all capital income is absolutely essential.
Declaration procedure (Form 103)
The distributing company must complete and submit Form 103 (Anticipatory tax declaration on returns from partnership interests) to the FTA. This form includes:
- Company identification (company name, UID, address)
- Distribution details (AGM date, gross amount, number of shares/interests)
- Anticipatory tax calculation (35% of the gross amount)
- List of beneficiaries (shareholders/partners)
The form can be completed online on the FTA portal.
Anticipatory tax and tax optimisation
Anticipatory tax has a direct impact on tax optimisation strategies, notably:
- Salary/dividend mix: salary is not subject to anticipatory tax, unlike dividends. However, dividends benefit from partial taxation (50-70%)
- Distribution timing: planning distributions to optimise cash flow (the 35% must be advanced before the refund)
- Capital contribution reserve (CCR): distributions from the capital contribution reserve (share premium) are exempt from anticipatory tax. For listed companies, since 2020, at least 50% of distributions must come from profit reserves (subject to anticipatory tax). Non-listed companies can still distribute the entire CCR free of anticipatory tax
Accounting entries related to anticipatory tax
Anticipatory tax involves specific entries in the accounting records:
| Transaction | Debit | Credit |
|---|---|---|
| Decision to distribute dividend | 2970 Retained earnings | 2000 Creditors / Dividends payable |
| Recording anticipatory tax | 2000 Dividends payable | 2210 Anticipatory tax due to FTA |
| Payment of net dividend to shareholder | 2000 Dividends payable | 1020 Bank |
| Payment of anticipatory tax to FTA | 2210 Anticipatory tax due to FTA | 1020 Bank |
The account numbers correspond to the PMC chart of accounts.
How AX-Fiduciaire supports you
We manage the entire process related to anticipatory tax for our clients:
- Distribution advice: optimal amount, timing, cash flow impact
- Form 103 preparation: complete and timely declaration to the FTA
- Accounting entries: correct recording in your accounts
- Refund application: Form 25 for legal entities
- Integration in tax return: for natural persons (tax return)
- Deadline monitoring: we ensure compliance with the 30-day and 3-year deadlines
AX-Fiduciaire tip: Before deciding on a dividend distribution, consult us to evaluate the overall tax impact (corporate tax + anticipatory tax + personal tax). The dividend is not always the best option - sometimes an optimised salary/dividend mix is more advantageous.
Questions about anticipatory tax? Contact our experts for personalised support.