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

India also brokered its first-ever multilateral APA last year, the Central Board of Taxes announced
A global tax framework may not materialise anytime soon, but a common set of principles is becoming increasingly necessary, Rudolf Winkenius also tells ITR
Kingsley Napley’s claimants are arguing that taxing the provision of education breaches the European Convention on Human Rights
While pillar two can progress without the US, it won’t reach the same heights without American involvement, argues Renáta Bláhová, founding partner of BMB Partners Taxand
There are unanswered questions as to how foreign investors could reclaim money via tax credits, advisers suggested
Amid an ever-changing tax environment, India’s advisory market is bustling with competition ahead of the 2025 World Tax rankings and ITR Awards
The deal comes after PwC had accused Paul McNab of using confidential information; in other news, McDermott hired a new London tax head from a US rival
Looking at transfer pricing simplification is “obviously helpful”, but it should be done in line with current standards, a senior government figure reportedly said
The UK Government’s plans to close the tax gap via increased HM Revenue and Customs investment have failed to impress local tax advisers
Under the merged scheme for R&D tax relief introduced last year, rules on contracted out R&D have changed. James Dudbridge argues for a proactive approach when reviewing companies’ commercial arrangements
Gift this article