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Fund Taxation Alert 2017-10

Fund Taxation Alert 2017-10

Switzerland – KPMG approach confirmed – refund for French UCITS SICAV



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Switzerland – KPMG approach confirmed – refund for French UCITS SICAV

On May 31, 2017, the Swiss Tax Authorities (“STA”), reimbursed the unduly levied Withholding Tax (“WHT”) on dividends paid from a Swiss entity to a French resident UCITS SICAV. This way the STA confirmed the KPMG approach regarding the determination of the ultimate beneficial owners of the dividends and their eligibility to the benefits of the French-Swiss Double Tax Treaty (“French-Swiss DTT”).


France and Switzerland have entered into a bilateral agreement, supplementary to the French-Swiss DTT, whereby French SICAVs and FCPs may be eligible themselves to file a reclaim for partial refund of Swiss WHT, limited to the proportion of its unitholders which are resident in France. Based on this, the funds should be able to reclaim 25% Swiss WHT suffered on dividend distribution from a Swiss company to the funds, on behalf of the investors.

In the case at hand, a French resident fund (“the fund”) filed a WHT reclaim following which the STA requested further information regarding the method used to determine the quota of ultimate beneficial owners resident in France. This additional information was requested to be able to determine the applicability of the French-Swiss DTT and avoid the reimbursement of the WHT at the investor’s level as well as at the level of the fund.

KPMG developed a method to disclose the investment structure in place via an affidavit and successfully showed that the vast majority of the ultimate beneficial owners were French residents that were held through financial intermediaries. This allowed the fund to reclaim the reimbursement of the totality of the WHT levied on the Swiss sourced dividends.

The KPMG approach permitted more transparency and presented a clear situation leading to a fast reimbursement.

Refund opportunities

Through their decision, the STA confirmed the approach taken by KPMG and allowed the reimbursement of Swiss WHT documented with an affidavit.

By clarifying the requirements for WHT reclaims in Switzerland new possibilities of reimbursement should be considered by French investment funds.

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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