Changes ahead for Swiss bonds

International Tax Review is part of Legal Benchmarking Limited, 4 Bouverie Street, London, EC4Y 8AX

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Changes ahead for Swiss bonds

Sponsored by

Sponsored_Firms_deloitte.png
New proposals announced by the Swiss government

René Zulauf and Manuel Angehrn of Deloitte Switzerland discuss Switzerland’s proposal to abolish withholding tax on Swiss bond interest and securities transfer tax on the trading of Swiss bonds.

With the intention of making Switzerland more attractive as an international centre for finance and securities trading, the Swiss Federal Government proposes to abolish withholding tax on interest payments on Swiss bonds and also the securities transfer tax on trading in Swiss bonds and certain other debt instruments. At its meeting on April 14 2021 the government issued the formal dispatch in relation to these intended changes. 

Switzerland currently levies withholding tax of 35% on interest on bonds issued in Switzerland and bonds issued abroad but reclassified as Swiss bonds. The respective withholding tax may be fully or partially reclaimed where a double taxation treaty applies. 

The current withholding tax on interest of Swiss bonds has prompted many companies, foreign as well as Swiss, to avoid issuing bonds in Switzerland and to carry out their financing activities abroad. There is also currently a securities transfer tax of 0.15% on the value of Swiss bonds traded, which has driven trading in these bonds partly offshore: this tax will also now be abolished.

The Swiss government believes that these measures will, to a large extent, bring the issuance market for Swiss bonds as well as trading in Swiss bonds back to Switzerland.

There is also a view that these changes may persuade many foreign companies to establish financing activities in Switzerland, in order to benefit from the low income tax rates and the favourable Swiss tax environment in general.

We believe that the abolition of the withholding tax and the securities transfer tax on Swiss bonds will strengthen substantially the position of Switzerland as an international centre for finance and treasury. This has the potential to bring many finance and treasury-related jobs back to Switzerland, which should more than compensate over the longer term for the short-term drop in tax revenues.  

René Zulauf

Partner, Deloitte Switzerland

E: rzulauf@deloitte.ch

 

Manuel Angehrn

Senior manager, Deloitte Switzerland

E: maangehrn@deloitte.ch

 

 

 

more across site & shared bottom lb ros

More from across our site

Heads of tax need to push their teams forward as strategic business advisers to add value across the organisation, says Sandy Markwick
Scott Bessent reportedly felt undermined by Musk naming Gary Shapley as acting IRS commissioner; in other news, Baker Tilly will combine with a top 15 US firm
The promise of nine years’ tax certainty and a ‘rational and pragmatic’ government process makes APAs a no-brainer, Indian tax advisers tell ITR
Despite garnering significant revenues from multinationals, Italy’s digital services tax presents pressing double taxation issues, say Stefano Simontacchi and Francesco Saverio Scandone of BonelliErede
ITR’s research shows that in-house tax counsel in Asia also feel underserved by their advisers’ international networks
World Tax global head of research Jon Moore tells ITR how his team spots standout submissions, and gives early statistical insights into this year’s entries
Australia’s conservative opposition will repeal controversial tax agent reporting rules if elected in the country’s May general election
Shapley would be the fourth person to hold the job this year; in other news, UK tax advisory firm MHA raised fewer funds than expected from its London IPO
The US needs to be involved in pillar one for there to be more international acceptance of the project, Michael Masciangelo says
The UK regulator is investigating EY’s auditing of the national postal service as it relates to the high-profile Horizon scandal, which saw hundreds wrongfully convicted
Gift this article