On March 10, 2017 the Swiss Federal Council and the Swiss Federal Department of Finance issued a press release announcing that during its meeting of March 10, 2017 the Swiss Federal Council approved the amendments to the Withholding Tax Ordinance. By doing so the Swiss Federal Council intends to strengthen the financing activities of groups in Switzerland. The amendments will enter into force on April 1, 2017.

At present, groups established in Switzerland often carry out targeted financing activities abroad. In this way, they avoid withholding tax, which would be due in certain situations were they to conduct the financing via group companies established in Switzerland. The Swiss economy thereby misses out on some of the added value in this sector.

For this added value to be retained in Switzerland, the Federal Council proposed adapting the Withholding Tax Ordinance. This amendment concerns those groups in which a Swiss group company (guarantor) provides a guarantee for a bond of a foreign group company (issuer) belonging to the same group. Forwarding of funds from the foreign issuer to a group company established in Switzerland will be possible up to the maximum amount of the equity capital of the issuer without the interest on it being subject to withholding tax.

The following documents were attached to the press release:

·   Withholding Tax Ordinance (German, French or Italian)

·   Report on the results of the consultation procedure for the amendment of the regulation on the withholding tax (German, French or Italian)

·   Commentary on the Amendment of the Withholding Tax Ordinance (Corporate Group Financing) (German, French or Italian)

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