Distribution of dividends from Switzerland abroad

Cross-Border Dividend Payments: Preserving Foreign Shareholder Capital and Withholding Tax

Reading time: 7 minutes | Published: 31 March 2026 | Updated: 30 September 2026

📌 In short: paying dividends to foreign shareholders

A dividend paid abroad by a company based in Switzerland is subject to the 35% withholding tax: the company (AG/SA or GmbH/Sàrl) pays 65% of the gross dividend to the shareholder and remits the 35% withheld to the Federal Tax Administration (FTA) within 30 days.
Exception: a dividend paid out of capital contribution reserves, recognised by the FTA, is exempt from withholding tax. A company listed on a Swiss stock exchange must, however, distribute at least as much from other reserves; otherwise, the distribution of these reserves is subject to withholding tax on half of the difference (Art. 5(1ter) WTA).
Refund under a double taxation agreement: the residual tax burden is generally reduced to 15%. The foreign shareholder (natural person) reclaims the 20% difference from the FTA using specific forms (Form 83 for France), within the deadline set by the applicable agreement: for a resident of France, the claim must reach the FTA within three years following the end of the calendar year in which the income was taxed in Switzerland.
Intra-group dividends: a foreign parent company holding a qualifying participation can, through the reporting procedure (prior authorisation requested with Form 823B on the basis of a double taxation agreement, or Form 823C on the basis of the Switzerland-EU agreement), have the dividend paid without the 35% deduction, apart from any residual tax provided for by the agreement.
Currency conversion is a second cost: a bank margin of 1.5% to 2.5% represents CHF 15,000 to 25,000 on a dividend of CHF 1 million converted into euros.

How does Swiss withholding tax apply to dividends paid abroad?

When a limited company (AG/SA) or a limited liability company (GmbH/Sàrl) domiciled in Switzerland decides to distribute a dividend, it faces a strict legal obligation: the deduction of withholding tax. This tax, designed as a safeguard against tax evasion, amounts to 35% of the gross amount of the pecuniary benefit (Art. 13 WTA).

The distributing company must pay only 65% of the dividend to the shareholder and settle the remaining 35% with the Federal Tax Administration (FTA) within 30 days.

The Strategic Exception: Capital Contribution Reserves (CCR)

There is a fundamental tax optimisation mechanism in Switzerland. If the company decides to distribute dividends taken from its capital contribution reserves (i.e., funds previously contributed by shareholders and formally recognised by the FTA), these dividends are exempt from withholding tax (Art. 5(1bis) WTA). The distribution is then made at a rate of 0% instead of 35%, a major opportunity to preserve shareholder cash flow at the source. A restriction applies to companies listed on a Swiss stock exchange: they must distribute other reserves of at least an equivalent amount; otherwise, the repayment of these reserves is taxable on half of the difference (Art. 5(1ter) WTA, subject to the exceptions in para. 1quater).

Double Taxation Agreements (DTA) and the Refund Deadline

For a shareholder residing abroad (natural person), recovering this withholding tax depends on the existence of a Double Taxation Agreement (DTA) between Switzerland and their country of residence (e.g., France, Germany, or Italy).

The residual tax burden is generally lowered to 15%. The shareholder receives 65% net, and can request a refund of 20% (35% − 15%) from the Swiss FTA using specific forms (for example, form 83 for France). The remaining 15% is often creditable against their taxes in their country of residence.

Beware of the refund deadline: For a shareholder domiciled in Switzerland, the right to a refund expires three years after the end of the calendar year in which the benefit fell due (Art. 32 WTA). For a shareholder domiciled abroad, the deadline follows from the applicable agreement: for a resident of France (Form 83), the claim must reach the FTA within three years following the end of the calendar year in which the income was taxed in Switzerland. Check the deadline that applies to your country of residence: rigorous deadline management is imperative.

The Reporting Procedure (Meldeverfahren) for Groups

For intra-group dividends (paid to a foreign parent company), paying 35% only to have to claim it back creates a critical liquidity issue (cash-flow trap). To overcome this, the Swiss company can use the reporting procedure.

The conditions depend on the applicable text. Double taxation agreements usually set a participation threshold of 10% to 25% of the capital (with Germany, for example, 10% held without interruption for at least 12 months); authorisation is then requested with form 823B. Where the agreement with the EU member state concerned sets no threshold, the agreement between Switzerland and the EU applies: a direct participation of at least 25% of the capital, held for at least two years, with the request filed on form 823C. Once authorisation is granted (valid for five years), the Swiss company fulfils its obligations by declaring the distribution: it does not withhold the tax up to the amount of the relief provided for, but pays any residual tax set by the agreement (FTA commentary on the ordinance of 4 May 2022, in French).

How much does converting dividends into foreign currency cost?

While tax optimisation is generally well managed by CFOs and fiduciaries, cross-border distribution suffers from a second scourge, too often underestimated: bank exchange risk.

When a Swiss company pays a dividend of CHF 1,000,000 to shareholders in the Eurozone via the traditional banking network, the transaction suffers a double impact:

Costs of a Swiss company paying dividends in foreign currency to foreign shareholders through the traditional banking channel: exchange margin (example on CHF 1 million) and SWIFT transfer fees
Source of Loss	Concrete Impact for the Shareholder
The Exchange Margin (Spread)	Traditional banks do not apply the real interbank rate. They embed an opaque margin often ranging from 1.5% to 2.5%. On CHF 1 million, this represents a dead loss of CHF 15,000 to 25,000 for the shareholders.
SWIFT Fees (Correspondents)	An international SWIFT transfer (OUR, SHA, BEN) passes through correspondent banks that take unpredictable flat fees, cutting into the liquidity ultimately received.

The B2B Solution: Multiple Payouts and Controlled Exchange Costs

To limit the gap between the dividend declared and the amount received by shareholders, the finance department should entrust the conversion to a provider other than its usual bank. A first step is to compare the real market rate with your bank's rate to precisely quantify the loss avoided.

By entrusting the conversion of your payouts to ibani, you limit the exchange loss borne by your shareholders:

Real interbank rate plus a sliding margin: the CHF/EUR (or other currency) conversion starts from the real market rate, plus a margin of 0.40% to 0.15% depending on the amount of each payout.
Transparency: through the published fee schedule, the company knows the margin applied to each payout, with no hidden deduction.
One route per beneficiary: in its ibani account, the company creates one route per shareholder: a dedicated Swiss IBAN linked to the shareholder's euro account. It pays the dividends in CHF from its bank by domestic transfers, and the conversion history can be exported to CSV or Excel for the accounts.
Local SEPA transfers: euro payouts go through the SEPA network, without the correspondent bank fees of the SWIFT network.

Discover ibani Business Solutions

B2B Frequently Asked Questions

In Switzerland, dividend distribution is subject to a federal withholding tax of 35%, deducted at the source by the distributing company and paid to the Federal Tax Administration (FTA), regardless of the shareholder's residence.

Recovery depends on Double Taxation Agreements (DTA). A foreign shareholder (natural or legal person) can request a partial or total refund of this tax (often reduced to 15% or 0%) by filing a formal request using specific FTA forms.

When a Swiss company pays dividends in CHF to EUR accounts, traditional banks apply opaque exchange margins. To limit this loss, the company can use a Swiss financial intermediary like ibani, which starts from the real interbank rate, plus a margin of 0.40% to 0.15% depending on the amount of each payout, and pays the euros through the SEPA network.

Official sources

Federal Act on Withholding Tax (WTA), Art. 5(1bis) and (1ter) (capital contribution reserves), Art. 13 (35% rate), Art. 16 (due within 30 days) and Art. 32 (refund deadline) — Fedlex (official French text), accessed 29 September 2026
Anticipatory Tax (Swiss withholding tax): declaration, payment and refund — Swiss Federal Tax Administration (FTA), accessed 29 September 2026
Double taxation Switzerland-France: convention and refund claim Form 83 — Swiss Federal Tax Administration (FTA), accessed 29 September 2026
Convention between Switzerland and France for the elimination of double taxation with respect to taxes on income and on capital and the prevention of tax fraud and evasion, Art. 11 (dividends, 15%) — Fedlex (official French text), accessed 29 September 2026
Withholding tax forms, including 823B and 823C (reporting procedure for dividends paid to a foreign parent company) — Swiss Federal Tax Administration (FTA) (page in French), accessed 30 September 2026
Commentary on the ordinance on the intra-group reporting procedure for withholding tax of 4 May 2022 — Swiss Federal Tax Administration (FTA) (document in French), accessed 30 September 2026
BOI-INT-CVB-CHE-10-20-30: refund of Swiss withholding tax (Form 83) — BOFiP, French tax administration (page in French), accessed 30 September 2026