A Swiss federal tax levied at source on investment income, principally dividends, bond interest and bank interest, as well as on lottery winnings and certain insurance benefits.
Rates: 35% on investment income and lottery winnings, 15% on life annuities and pensions, 8% on other insurance benefits.
Its purpose is to discourage undeclared income: a Swiss taxpayer who declares the income properly reclaims the tax in full, through the cantonal tax return for individuals or directly from the ESTV for companies. It therefore functions as a security deposit rather than a final charge. Residents abroad may reclaim part of it under a double taxation treaty.
Known in German as Verrechnungssteuer and in French as impôt anticipé. It is a different tax from source tax on salaries (Quellensteuer, impôt à la source), though English often renders both as withholding tax.
