Simultaneous dividend booking in company groups permitted
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This clarification states, that a dividend decided by a daughter company in its business year n+1, can be booked as earnings from participations by the mother company already in the years, in which the earnings have been generated.
For approximately two years, due to several pending decisions of the FTA, it was unclear if a mother company can already show the earnings from participation in the year, in which they have been obtained. The uncertainty was mainly if the right of recovery of the withholding tax of 35 % of the dividend would be granted. At the beginning of the discussion the FAT stated that such right of recovery would only be granted if the dividend was booked in the year of her due date.
In her notice the FTA clearly states that a simultaneous profit distribution is permitted. Therefore, the respective dividend income has to be booked as an accrual (transitory assets versus income from participations – with the necessary reverse booking at the beginning of the following business year). This explicitly leads to the right of recovery of the withholding taxes.
The recovery of withholding taxes in groups is often done by the favourable notification procedure, where the tax has not to be paid but the authority only to be notified about it. With the shown procedure the mother company fulfils the regulations of Art. 25 par 1 of the withholding tax law and also complies with the conditions of Art 26a of the withholding tax decree. Hence, the right of recovery is also granted within the notification procedure.
Either in the respective Notice of the FTA, which you can download in our downloads section (only german version). Or with the following link to the FTA where at least a french or italian version is available as well https://www.estv.admin.ch/estv/de/home/allgemein/steuerinformationen/dienstleistungen/mitteilungen.html
