Swiss Stamp tax

Practice clarification with regard to in-kind redemption of fund units/shares

In its notice of 12 January 2021, the Swiss Federal Tax Administration (FTA) has clarified its practice in connection with in-kind redemptions of Swiss and foreign investment fund units/shares.

The return of Swiss and foreign fund units/shares to the fund for redemption by the unit/shareholder is exempt from Swiss stamp tax. However, if the claim is settled with the delivery of taxable securities from the fund's assets instead of a cash payment (i.e. in-kind redemption), this generally constitutes a transfer of taxable securities for consideration according to the FTA and is subsequently subject to Swiss stamp tax. In-kind redemptions (i.e. repayments of net assets to unit/shareholders by means of securities) are only exempt from Swiss stamp tax if the redemption is made as part of a (full or partial) liquidation of the investment fund.

Thus, in each case of a redemption of fund units/shares where the unit/shareholder receives securities instead of cash, it must be reviewed whether a partial or full liquidation of the investment fund takes place. In mass proceedings, the default rule "subject to tax" is probably appropriate.

We will be happy to answer any questions you may have.

January 2021 | Author: Roland Reding

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