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How Italian Tax Resident Can Reclaim Swiss Withholding Tax on Swiss Dividends

Maurizio Bottoni's picture

Many tax payers, resident in Italy, who adhered to the Voluntary Disclosure to regularize their fiscal situation both for fiscal monitoring purposes (RW) and for income tax purposes, noted that the Swiss banks, where their money was invested, applied the Swiss anticipatory tax (Imposta preventiva svizzera) equal to 35% on dividends related to securities issued by Swiss entities too.

According to the Treaty against double taxation in force between Italy and Switzerland, dividends paid by a company which is resident in Switzerland to a resident in Italy may be taxed in Italy. “However, such dividends may also be taxed in the contracting State of which the company paying the dividends is a resident and according to the laws of the State (i.e. Switzerland) but if the beneficial owner of the dividends is a resident of the other contracting State (i.e. Italy), the tax so charged shall not exceed 15% of the gross amount of dividends” (article 10 of the Treaty).

Stated the above, as the Swiss anticipatory tax is higher than the withholding tax provided by article 10 of the above mentioned tax Treaty, the tax payers resident in Italy can claim to refund the amount (20%) of the exciding withholding tax applied on dividends. Of course, the tax payer must demonstrate, if any, that these dividends have been taxed in Italy.

According to the Swiss Cantonal Tax Authority the claims are processed depending on the date of receipt. The length of processing the claims depends on the quality of the received claims as well as on the quantity received.

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Maurizio Bottoni's picture

Maurizio Bottoni is the senior partner of Interconsulting. As a consultant in one of the Big Four he has developed a deep knowledge of the Italian and International tax law, through the involvement in operations and reorganization of multinationals. Extraordinary transactions and international issues are his daily business.