Insane Amount: Switzerland Stops 2.4 Billion Tax Refund to German

In 2024, a German applicant requested the refund of 2.4 billion Swiss francs in withholding tax from Switzerland.

The Swiss Federal Tax Administration (SFTA) stopped the payment after formal errors and partially expired claims were discovered during the review of the application.

The withholding tax in Switzerland is 35 percent on capital income such as dividends and interest. Foreign applicants can reclaim part of this tax according to double taxation agreements. In the case of Germany, the refund is a maximum of 20 percent.

The SFTA stated that the application initially appeared plausible, but upon closer inspection, it showed deficiencies. The incorrect completion of the online form and expired claims led to the rejection of the application. Whether the applicant actually had a claim to the entire amount was left open by the SFTA.

The case highlights the importance of correct and timely applications for the refund of withholding tax. Applications must be submitted within three years after the end of the calendar year in which the taxable service was due. Since 2020, electronic application via the SFTA's online portal is mandatory for persons residing in Germany.

The withholding tax in Switzerland serves to ensure the proper taxation of capital income. With correct declaration, domestic taxpayers can fully reclaim the tax. For foreign applicants, the regulations of the respective double taxation agreements apply.

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