The Swiss Federal Tax Administration (SFTA) has published a notice relating to the amendment of the VSTG. In the notice, the SFTA provides information on changes in collection and declaration procedures for withholding tax (“WHT”) as applicable to capital growth funds.
In the case of capital growth funds, WHT was previously collected when unit certificates were redeemed and was applied to income accrued since the fund’s launch.
Investors are now subject to WHT as soon as income is reinvested.
“WHT is now collected as soon as reinvestment takes place,” says a Credit Suisse spokesman in Zurich. “This means that only 65% of income is reinvested (i.e. after deduction of WHT). Investors who pay tax on their reinvested income can reclaim the withholding tax.”