Federal stamp duties are taxes levied by the Swiss Confederation on certain specific legal transactions, in particular the creation (issue) and trading of securities, as well as on insurance premiums.
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What types of stamp duty are charged in Switzerland?
The issue stamp duty relates to the creation and increases in capital of Swiss companies and cooperatives, calculated on the basis of the nominal value of the shares issued or increased.
The trading stamp duty applied to purchases and sales of Swiss and foreign securities by Swiss securities dealers. It is generally calculated according to the value of the securities bought or sold.
The stamp duty on insurance premiums applies to different types of insurance (third-party liability, fire, comprehensive and household). It is generally calculated on the basis of the amount of premiums paid. This tax is generally paid by policyholders.
Issue stamp duty
Swiss stamp duty is one of three stamp duties. It is levied on the creation or increase, whether for a consideration or free of charge, of participation rights in various forms, in particular :
- Shares in Swiss public limited companies and limited partnerships with shares
- Shares in Swiss limited liability companies (LLC)
- Shares in Swiss cooperatives
- Profit-sharing certificates issued by Swiss companies or cooperatives (rights to share in net profits or liquidation results)
- Participation certificates issued by Swiss companies, cooperatives or commercial enterprises governed by public law
By participation rights we mean :
- Additional payments made by shareholders, cooperative members or members to the company or cooperative without any corresponding consideration and without increasing the share capital entered in the commercial register or the amount paid on the cooperative's shares.
- Share transfer: the transfer of the majority of the shares or corporate units of a Swiss company or cooperative that is economically liquidated or whose assets have been made liquid. Art.5 LT al.2 let. B LT
The issue duty amounts to: 1.0% on Swiss participation rights.
The creation of companies or an increase in capital using participation rights issued for valuable consideration benefits from a franchise of 1 million francs.
The tax liability lies with the issuing company.
Exceptions to stamp duty on issues
Shareholdings in companies
Participation rights in public limited companies, partnerships limited by shares, limited liability companies or cooperative societies which carry on their activity, without any purpose for profit, for the benefit of the poor and the sick, religious worship, education or other works of public utility, or which aim to provide low-cost housing or to guarantee, insofar as, according to the Articles of Association:
- dividends are limited to a maximum of 6% of the paid-up share capital
- the payment of directors' fees is excluded
- the balance of the assets, after repayment of the paid-up share capital, is allocated to similar purposes in the event of the company being dissolved
But also participation rights issued for valuable consideration when a public limited company, a partnership limited by shares or a limited liability company is founded or its capital is increased, provided that the total amount paid in by shareholders does not exceed one million francs
Merger participation rights
Shareholding rights created or increased pursuant to decisions to merge or merge economically equivalent to mergers, transformations and demergers of public limited companies, partnerships limited by shares, limited liability companies or cooperative societies.
Cooperative shareholdings
The creation of participation rights in cooperative societies or an increase in their nominal value, as long as the members' contributions, as defined in art. 5, do not exceed a total of one million Swiss francs.
Participation rights that are created or increased by means of a cooperative bank's participation capital or social participation capital, provided that the company or cooperative proves that it has paid the issue duty on this participation capital or social participation capital.
Shareholdings in transport companies
Participation rights in transport companies, created or increased in favour of public authorities as a result of their investment contributions.
Shareholding rights increased by premiums
Participation rights created or increased by means of previous premiums and payments from shareholders or members, provided that the company can prove that it has paid the issue duty on these premiums and payments.
Rights to units in collective investment schemes
Also excluded is the creation of units in collective investments within the meaning of the LPCC.
Rights to investment shares for the takeover of a farm
Shareholdings created or increased in order to take over a business or part of a business of a public limited company, a partnership limited by shares, a limited liability company or a cooperative provided that, according to the balance sheet for the last financial year, half of the capital and legal reserves of this company or cooperative are no longer covered.
In the case of sanitation
The creation of participation rights or the increase in their nominal value, in the event of an open reorganisation, up to their amount prior to the reorganisation as well as additional payments by shareholders or members in the event of a silent reorganisation, provided that:
- existing losses are eliminated, and that
- benefits from shareholders or associates do not exceed CHF 10 million in total
Caution: If the conditions for exemption are no longer met, the duty must be paid on the participation rights still in existence.
Trading stamp duty
Swiss trading duty is the 2nd stamp duty levied by the Swiss Confederation. Its purpose is to tax the transfer for consideration of ownership of different securities if one of the contracting parties or intermediaries is considered to be a securities trader.
Taxable items
- Bonds
- Shares, SA or Sàrl
- Shares and participation certificates in cooperative societies
- Participation certificates and dividend-right certificates
- Units in collective investment schemes within the meaning of the LPCC
Securities dealer
The question of who is a securities dealer needs to be addressed to determine whether the institution in question must withhold and pay stamp duty on the transactions it carries out.
The following are considered to be securities dealers :
- Banks
- Natural or legal persons as well as permanent establishments and branches in Switzerland of foreign companies whose activity consists exclusively or essentially of :
- Trading in taxable documents on behalf of third parties
- To act as an investment adviser or asset manager in the purchase and sale of taxable documents
- Companies, occupational pension schemes and restricted pension schemes whose assets comprise taxable items of more than CHF 10 million according to the latest balance sheet.
- The Confederation, the cantons and the political communes, including their establishments, provided that their accounts show taxable items of more than CHF 10 million.
Exceptions to trading stamp duty
There are, however, exceptions to the levying of negotiation stamp duty.
- l’émission d’actions, de parts sociales de sociétés à responsabilité limitée et de sociétés coopératives, de bons de participation sociale de banques coopérative, de bons de participation, de bons de jouissance et de parts de placements collectifs au sens de la LPCC85, d’obligations et de papiers monétaires suisses, y compris la prise ferme par une banque ou une société de participation et la répartition des titres à l’occasion de leur émission ultérieure;
- the contribution of securities used to pay up shares, units in limited liability companies and cooperative societies, cooperative bank participation certificates, participation certificates and units in collective investment schemes within the meaning of the LPCC, whether these shares, units or certificates are Swiss or foreign
- trading in subscription rights
- delivery of securities for redemption
- l’émission d’obligations de débiteurs domiciliés à l’étranger libellées en monnaie étrangère (euro-obligations), ainsi que celle de droits de participation à des sociétés étrangères; seuls sont des euro-obligations les titres pour lesquels le versement d’intérêts aussi bien que le remboursement du capital interviennent en monnaie étrangère;
- trading in Swiss and foreign money market paper
- the purchase and sale of foreign bonds and the mediation of purchases and sales on behalf of the buyer or seller when it is a foreign contracting party
- the transfer of taxable securities which, as part of a restructuring, in particular a merger, demerger or conversion, is carried out by the company being acquired, demerged or converted for the benefit of the acquiring or converted company
- the acquisition or disposal of taxable documents in the event of restructuring within the meaning of art. 61 para. 3 and art. 64 para. 1bis of the Federal Act of 14 December 1990 on Direct Federal Taxation, as well as in the event of the transfer of holdings of at least 20% of the share capital or registered capital of other companies to a Swiss or foreign group company. Professional securities dealers within the meaning of Article 13(3)(a) and (b) no. 1 are exempt from the relevant part of the duties if they sell securities from their trading inventory or acquire securities in order to increase their trading inventory. Commercial stocks are stocks of securities made up of taxable documents resulting from the commercial activity of the professional trader, with the exception of holdings and stocks with the characteristics of an investment.
Stamp duty on insurance premiums
The right relates to the payment of insurance premiums:
- which form part of the Swiss portfolio of an insurer subject to supervision by the Confederation or a Swiss insurer with public law status
- that a Swiss policyholder has concluded with a foreign insurer that is not subject to supervision by the Confederation.
Exceptions to trading stamp duty
Premium payments are not subject to duty:
- life insurance not subject to surrender and life insurance subject to surrender where premiums are paid periodically; the Federal Council shall lay down the necessary delimitations in an ordinance
- life insurance, provided that the insurance is used for occupational pension provision within the meaning of the LPP114
- life insurance taken out by a policyholder domiciled abroad
- health and disability insurance
- accident insurance
- insurance of goods en route
- insurance against damage to agricultural land and crops caused by the forces of nature
- unemployment insurance
- hail insurance
- livestock insurance
- reinsurance
- hull insurance for aircraft and boats described in the ordinance, which are used mainly for the professional transport of persons and goods abroad
- insurance against fire, theft, glass breakage, water damage, credit insurance, machinery and jewellery, if the taxpayer establishes that the insured item is abroad
FAQ - Stamp duty
In Switzerland, federal stamp duty is levied by the Federal Tax Administration.
There are three types of stamp duty in Switzerland:
- Negotiation stamp duty.
- Stamp duty on insurance premiums.
- Stamp duty on equity capital.
Trading stamp duty is levied on the purchase and sale of shares, bonds, structured products, investment funds, ETFs and other securities.
Stamp duty is collected by the bank or broker.
In Switzerland, stamp duty is levied on insurance premiums such as third-party liability insurance, motor insurance, travel insurance and pet insurance.
Premiums for health insurance, accident insurance, disability insurance, unemployment insurance, livestock insurance and most life insurance are not subject to stamp duty.s
When a Swiss company issues new shares, partnership shares, cooperative society shares, dividend-right certificates or participation certificates, it must pay an issue duty to the Confederation. However, this fee is payable only if the value of the newly issued securities exceeds CHF 1 million.
