Germany–Switzerland · Dividends
35% withholding tax · 15% treaty rate · German taxationSwiss dividends for German residents
If you are tax resident in Germany and receive dividends from Swiss shares, you need to coordinate Swiss withholding tax and German taxation. Switzerland generally withholds 35% initially. For ordinary portfolio shares, the Germany–Switzerland double taxation agreement generally limits the Swiss tax retained to 15%. The excess can generally be reclaimed from Switzerland.
How it works
Germany taxes the dividend; Switzerland may levy withholding tax
If an investor is tax resident in Germany, a dividend paid by a Swiss company is generally subject to German income tax.
Switzerland, as the country where the distributing company is resident, may also levy withholding tax on the dividend.
The Germany–Switzerland double taxation agreement coordinates the two countries’ taxing rights.
Portfolio shares
A 35% deduction does not mean a final Swiss tax burden of 35%
An ordinary Swiss dividend is initially subject to a 35% deduction for Swiss withholding tax.
For a private portfolio investor who is tax resident in Germany and qualifies for treaty relief, the treaty generally reduces the final Swiss tax burden to 15%.
- Gross dividend: 100%
- Swiss withholding: 35%
- Swiss tax retained under the treaty: generally 15%
- Refund: generally 20 percentage points
- German taxation also applies
- Swiss tax retained under the treaty is generally creditable in Germany
Swiss withholding tax
Switzerland initially levies 35% withholding tax
Dividends paid by a Swiss company are generally subject to Swiss withholding tax at 35%.
For example, an investor receiving a gross dividend of CHF 10,000 will usually receive an initial net payment of only CHF 6,500.
Gross dividend
The full distribution is the starting point for the tax assessment.
Swiss deduction
The Swiss company or paying agent initially accounts for the withholding tax.
Net payment
The initial net payment is not the same as the income taxable in Germany.
Report the gross dividend in Germany
German taxation is generally based on the gross dividend before Swiss withholding tax. The tax deducted is then dealt with separately.
Article 10 of the treaty
For ordinary portfolio shares, Switzerland may generally retain 15%
Article 10 of the Germany–Switzerland double taxation agreement allows both the country of residence and the source country to tax the dividend.
For a typical private investor holding ordinary portfolio shares who is the beneficial owner and qualifies for treaty relief, Swiss withholding tax is generally limited to 15% of the gross dividend under the treaty.
| Stage | Tax on the gross dividend | Treatment |
|---|---|---|
| Swiss withholding | 35% | Initially deducted under Swiss withholding tax law |
| Swiss tax retained under the treaty | 15% | Generally remains payable in Switzerland for an ordinary portfolio dividend |
| Treaty refund | 20 percentage points | Generally claimed from the Swiss Federal Tax Administration (FTA) |
Different rules can apply to qualifying corporate shareholdings
Qualifying corporate shareholders and certain special distributions may be subject to different treaty rules. This page focuses primarily on private portfolio investors.
German taxation
Swiss dividends are generally investment income for German tax purposes
For a private investor subject to unlimited German income tax liability, dividends from Swiss shares generally constitute investment income.
Unless a special rule applies, the separate tax rate under section 32d(1) of the German Income Tax Act (EStG) is generally 25%. Solidarity surcharge and church tax may also apply.
Investment income
The dividend is generally treated as investment income.
Separate tax rate
Private investment income is generally subject to the special rate under section 32d EStG.
Saver’s allowance
Any unused saver’s allowance (Sparer-Pauschbetrag) may reduce the German tax burden.
A lower-rate assessment may be available
If taxation at the ordinary income tax rates would be more favourable, an assessment under section 32d(6) EStG (Günstigerprüfung) may be requested, subject to the statutory conditions.
German foreign tax credit
The full Swiss deduction is not automatically creditable
Section 32d(5) EStG generally permits a credit for foreign tax against German tax.
However, any entitlement to a reduction or refund of the foreign tax must be taken into account.
35% Swiss withholding ≠ a 35% German tax credit
If the treaty entitles you to reclaim 20 percentage points from Switzerland, that refundable portion generally cannot also be credited as foreign tax in Germany.
- 35% actually withheld
- 20 percentage points generally refundable
- 15% Swiss tax retained under the treaty
- Generally, only the remaining tax is creditable
- The credit is also limited by the German tax due
The credit may be less than 15%
Foreign tax can only be credited up to the amount of German tax attributable to the relevant investment income. This may matter, for example, where part of the saver’s allowance is still available or the German tax burden is low.
Refund
Portfolio investors can generally reclaim 20 percentage points of Swiss withholding tax
Where the ordinary treaty rate is 15% and Switzerland has actually withheld 35%, the refund entitlement generally amounts to 20% of the gross dividend.
For persons resident in Germany, refund applications for income due on or after 1 January 2020 are prepared using the Swiss FTA’s electronic procedure for Germany (eF85).
Record the dividends
Document the distribution, the company and the tax deducted.
Check treaty eligibility
Check German tax residence, beneficial ownership and entitlement to treaty relief.
Prepare the Swiss claim
Prepare the refund application using the designated FTA procedure.
Coordinate German taxation
Treat the refundable and non-refundable portions of Swiss tax correctly.
The refund procedure is covered in a separate article
Forms, deadlines, residence certification, supporting documents and practical submission requirements are explained in our article on reclaiming Swiss withholding tax.
German or Swiss custodian bank
The account’s location does not change the underlying tax liability
Swiss shares can be held in either a German or a Swiss securities account. The basic tax treatment of the dividend remains the same.
German custodian bank
A German paying agent may already account for German withholding tax on investment income and creditable foreign tax when processing the dividend.
Swiss custodian bank
German tax is generally not withheld. Taxable dividends must be reported in Germany.
Tax return
Taxable investment income that has not been subject to German withholding tax generally needs to be reported in the German income tax return.
A Swiss tax report is not automatically a German tax certificate
For a Swiss securities account, gross dividends, Swiss tax deducted and any other investment income must be prepared in accordance with German tax rules.
Example
CHF 10,000 in Swiss dividends for a German resident
Swiss shares held as private assets
An investor who is tax resident in Germany receives a gross dividend of CHF 10,000 from ordinary Swiss portfolio shares.
| Item | Amount |
|---|---|
| Gross dividend | CHF 10,000 |
| 35% Swiss withholding tax | CHF 3,500 |
| Net payment | CHF 6,500 |
| 15% Swiss tax retained under the treaty | CHF 1,500 |
| Generally refundable | CHF 2,000 |
German taxation generally takes the full gross dividend into account. The Swiss tax retained under the treaty may be credited against German tax within the statutory limits.
This example does not calculate the final German tax payable
The actual German tax burden depends on factors including the saver’s allowance, church tax, solidarity surcharge, eligible losses, other investment income and any assessment at more favourable ordinary income tax rates.
Special cases
Not every Swiss company distribution is a straightforward portfolio case
Substantial or business-related holdings
Larger or business-related holdings require a separate assessment, including possible exceptions to Germany’s flat investment income tax regime.
Employee shares
Distributions and share ownership may also raise employment income issues.
Corporate investors
Shareholdings held by companies are subject to different tax rules.
Funds & ETFs
Fund units also require an assessment under German investment fund tax law.
A Swiss share is not the same as a Swiss fund
A directly held share in a Swiss company is not subject to the same German tax rules as a Swiss fund or ETF.
Documents
Information needed for Swiss dividends
Dividend statement
Gross dividend, net amount, value date and distributing company.
Tax deducted
The Swiss withholding tax actually deducted.
Security details
Company, ISIN or Swiss security number (Valor), and number of shares.
Refund records
Applications submitted, refunds received and Swiss tax decisions.
Annual records
Annual securities account statement or tax report from the German or Swiss bank.
Currency information
CHF amounts must be converted into euros for the German tax return.
Common mistakes
Where Swiss dividends are often treated incorrectly
Reporting only the net dividend
Only the payment received after Swiss withholding tax is reported in Germany.
Claiming a credit for the full 35%
The entitlement to a Swiss refund is ignored.
Forgetting the refund
Swiss withholding tax above the treaty rate becomes an unnecessary cost.
Omitting income from a Swiss account
The absence of German withholding tax is confused with an absence of German tax liability.
Applying the treaty rate indiscriminately
Special shareholding arrangements are treated as ordinary portfolio investments.
Confusing funds with shares
The specific rules of German investment fund tax law are overlooked.
Failing to convert CHF amounts
Swiss amounts are used without a reliable conversion into euros.
Counting the refund twice
Refundable tax is claimed as a German tax credit and later also refunded by Switzerland.
Frequently asked questions
Swiss dividends for German residents
What is the Swiss withholding tax rate on dividends?
How much Swiss tax may ultimately remain payable by a German investor?
How much can I reclaim from Switzerland?
Do I pay German tax on the gross or net dividend?
Can I claim a German tax credit for the full 35%?
Can I credit the remaining 15% against German tax?
What is the German tax rate on the dividend?
What if my Swiss securities account does not withhold German tax?
Do I need to reclaim Swiss withholding tax?
Does the 15% treaty rate also apply to larger shareholdings?
Do the same rules apply to Swiss ETFs?
Is a Swiss securities account tax-free in Germany?
Further reading
Swiss shares and investments
Germany–Switzerland tax advice
Do you receive Swiss dividends while living in Germany?
We review gross dividends, Swiss withholding tax, treaty refunds, German taxation, foreign tax credits and the reporting of Swiss investment income.
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