Subsequent refund of the withholding tax possible from 2019

Currently, withholding tax is not refunded if received dividends are not correctly declared in the tax return. It did not matter whether this was done intentionally or negligently. Due to the recently very strict jurisprudence regarding this matter, criticism was voiced, which led the parliament to change the regulations, allowing a retrospective refund from 2019, even retroactively for claims since 2014, provided that no legally binding judgment has been made yet.

Withholding tax exists for the purpose of preventing tax evasion. It is levied on earnings from movable capital assets (in particular dividends, interest, and lottery winnings), on life annuities and pensions, and on certain other insurance benefits. As long as all income is correctly declared, it will be refunded. If one fails to do so, the claim for a refund currently lapses. The Federal Court has been very strict in recent cases regarding the refund of withholding tax, which has been critically received. This led to the Federal Council commissioning a draft law to relax the requirements for proper declaration. On September 28, 2018, the parliament now adopted the amendment. The new regulation means that the claim for a refund of withholding tax will not lapse despite missing declarations in the tax return if the declaration is amended or if the tax authorities offset the benefit. This is provided that it occurs before the completion of an assessment, audit, or subsequent tax procedure and the non-declaration in the tax return was negligent. The application for a refund must still be made within three years. Contrary to the advice of the Federal Council, the parliament even spoke out for retroactivity. The regulation applies to claims that have arisen since January 1, 2014, provided that a legally binding decision on the claim for refund of withholding tax has not yet been made. So far, no referendum has been taken. Should such not occur by January 17, 2019, the changes will come into effect retroactively from January 1, 2019.

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