Swiss 10/20/100 Non-Bank Rule

Legal Basis

Unlike many countries, Switzerland does not levy an interest withholding tax on interest paid on private and commercial loans (including on arm's length inter-company loans). However, a 35% withholding tax is levied on interest paid to Swiss or foreign lenders on bonds or similar debt instruments issued by Swiss resident issuers, as well as on bank interest.

Notions of Bond and Bank under Swiss WHT

Under Swiss tax law, the definition of a bond is broader than commonly under-stood under Swiss civil law or referred to in financial markets. The Swiss Federal Supreme Court considers that bonds or debentures are written debt acknowledgments for fixed amounts which are issued in multiple tranches at comparable conditions for the purpose of collective financing, and which allow the lender to evidence, reclaim or transfer its receivable.