What is Gewinnausschüttung (Profit Distribution)?
Gewinnausschüttung is the formal distribution of retained profits from a Swiss company to its shareholders, typically as a dividend (Dividende). Under Swiss company law, profit distributions from an AG or GmbH require a shareholder resolution at the annual general meeting, based on audited annual accounts. They trigger Verrechnungssteuer at 35% and personal income tax for the recipient shareholders.
Current Rate (2025)
Trigger: Verrechnungssteuer 35% withheld at source. Personal income tax: partial taxation — 70% of dividend taxable for federal, 60-70% for cantonal (if shareholder holds 10%+ or CHF 1m+ value).
Example
A GmbH resolves at its AGM to distribute CHF 80,000 of retained profit to its sole owner. The company withholds CHF 28,000 (35%) and pays the owner CHF 52,000. The owner declares CHF 80,000 gross in their tax return, applies the partial taxation reduction, and reclaims the CHF 28,000 credit.
How Gewinnausschüttung (Profit Distribution) works in Switzerland
Gewinnausschüttung is the mechanism by which company profits reach shareholders and is one of the most planning-sensitive areas of Swiss owner-director taxation.\n\n**Legal process for an AG**\n1. The Verwaltungsrat (board) prepares audited annual accounts\n2. The annual Generalversammlung (AGM) approves the accounts and passes a resolution to distribute dividends\n3. The resolution must specify the amount per share and the payment date\n4. The AG withholds 35% Verrechnungssteuer before payment\n5. Form 102 is filed with the ESTV within 30 days of payment\n\n**Legal process for a GmbH**\nThe process is the same but the AGM is replaced by a shareholders' meeting (Gesellschafterversammlung).\n\n**Salary vs dividend planning**\nFor owner-directors, the classic Swiss tax planning question is the Lohn-Dividenden-Mix (salary-dividend mix):\n- Salary: deductible for Gewinnsteuer; subject to AHV/IV/EO at 10.6% employer + 10.6% employee; subject to income tax at marginal rate; no partial taxation benefit\n- Dividend: NOT deductible for Gewinnsteuer (paid from after-tax profit); triggers 35% Verrechnungssteuer (reclaimed); benefits from partial taxation at personal level; NO AHV on dividend income\n\nThe optimal mix depends on the AHV contribution base, pension (Pensionskasse) considerations, and marginal income tax rates. Swiss fiduciaries typically model this annually.\n\n**Transposition risk**\nIf a shareholder sells their company's shares to another company they own (creating a holding structure) above the intrinsic value, the ESTV may characterise the excess as a hidden dividend distribution (Transpositionsgewinn) and subject it to income tax. Swiss tax law has specific anti-avoidance rules in this area (Art. 20a DBG).\n\n**Interim dividends**\nSince the 2023 OR reform, Swiss AGs can now pay interim dividends during the financial year (previously only possible after year-end approval of audited accounts). Interim dividends require board approval and an auditor's review, but do not require a full AGM.
Related terms
Verrechnungssteuer is Switzerland's federal withholding tax, levied at 35% on dividends from Swiss companies, interest on Swiss bonds and bank deposits exceeding CHF 200 per year, and lottery winnings. It is a collection mechanism to ensure taxpayer compliance — Swiss residents can reclaim the full amount by declaring the income in their tax return.
In Switzerland, dividends paid by a company are subject to Verrechnungssteuer (withholding tax) at 35% at source. Shareholders resident in Switzerland can reclaim the full 35% against their personal income tax (Einkommenssteuer). For qualifying corporate shareholders holding at least 10% of share capital (or participation worth CHF 1 million), a Beteiligungsabzug (participation deduction) effectively exempts most dividend income at the corporate level.
A GmbH (Société à responsabilité limitée / Società a responsabilità limitata) is Switzerland's most common private limited company form. It requires a minimum share capital of CHF 20,000, all of which must be paid up on formation. Liability is limited to the company's assets. It is governed by the Swiss Code of Obligations (OR/CO), Articles 772–827.
An AG (Société anonyme / Società anonima) is Switzerland's public limited company form. It requires a minimum share capital of CHF 100,000, of which at least 50% (minimum CHF 50,000) must be paid up on formation. Shares can be issued as registered shares (Namenaktien) or bearer shares (Inhaberaktien, now restricted). Governed by OR Articles 620–763.
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