Trusts and Swiss withholding tax—who gets to claim reimbursement, and trustees as future paying agents?

Abstract

Abstract Swiss withholding tax (WHT) is levied on Swiss investment income at a hefty 35%. Reimbursement, in full or in part, chiefly depends on the recipient’s tax residence at the time the income became due and his being its “beneficial owner”. If the income subject to WHT is received by a trust, then the eligibility to claim reimbursement may lie with the settlor or with the beneficiary, and, in very limited circumstances, with the trustee or the trust. Finally, the article also takes a look ahead: Swiss trustees may become paying agents under a proposed legislative amendment.