# What is Gewinnausschüttung (Profit Distribution)?

Country: Switzerland

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.

Source: https://www.estv.admin.ch/estv/de/home/verrechnungssteuer/verrechnungssteuer.html

## Related terms

- [Verrechnungssteuer](https://accounts-os.com/ch/glossary/verrechnungssteuer-ch)
- [Dividendenbesteuerung (Dividend Taxation)](https://accounts-os.com/ch/glossary/dividendenbesteuerung-ch)
- [GmbH (Gesellschaft mit beschränkter Haftung)](https://accounts-os.com/ch/glossary/gmbh-ch)
- [AG (Aktiengesellschaft)](https://accounts-os.com/ch/glossary/ag-ch)