Principle
An asset deal is not a relevant procedure for the purposes of the withholding tax. No withholding tax is therefore due.
Exception
Important where the vendor is a legal person:
- the proceeds of the sale may potentially be liable to the withholding tax as retained profit.
- liquidation (formal or de facto): any amount exceeding the nominal value of the shares of the vendor which is to be liquidated will be liable to the withholding tax.
- shareholder loans: danger that the Swiss Tax Authorities may assume these to be sham loans.
Sham shareholder loans?
The decisive criteria, taking account of the specific circumstances of each individual case, are the following:
- the creditworthiness of the shareholder
- the existence of a written loan agreement
- nature of credit (credit facility or consumer credit)
- amount loaned
- interest at market rates
- form of redemption of interest (regular interest payments or accumulated with capital)
- loan repayment
- division of risk (at arm’s length / equivalent to third party).
