Withholding tax

Withholding tax is a tax on capital gains (such as dividends or interest) that is levied directly at the source, i.e., where the income is generated. The paying institution (e.g., a bank or securities firm) withholds the tax and pays it directly to the tax office of the respective country. In Switzerland, this tax is called Anticipatory Tax.

To avoid double taxation, it can usually be (partially) credited against the domestic tax liability, provided that a double taxation agreement (DTA) exists.

You can learn more about withholding tax, withholding tax on interest, and tax refunds in our blog post «The crux of withholding tax».