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As a Swiss investor, you've probably come across the topic of tax-free dividends at some point - especially if you're investing in a dividend strategy. Sounds pretty attractive at first glance, doesn't it?
In this article, you can find out exactly what you should consider with tax-free dividends, current examples and how you can use them to your advantage.
To understand: With a Share dividend is a profit distribution from a listed company to you as a shareholder.
Swiss equities: Dividends are generally subject to Swiss income tax and withholding tax and must be declared as a gross dividend in the tax return. The 351TP3 withholding tax is fully credited if you declare it correctly in the securities register.
Foreign shares: If you have bought shares in a foreign company, you will have to pay withholding tax on the dividends (Find out more in our comprehensive ETF tax guide). This varies from country to country. There is a reclaimable portion and a non-reclaimable portion. The reclaimable portion depends on the double taxation agreement between Switzerland and the respective country.
As a rule, dividends therefore come from retained earnings and are taxable. So why are there tax-free dividends in Switzerland?
For dividend payments, listed companies can also use the Capital contribution reserves (KER) use Capital contribution reserves are contributions from shareholders who have been tax-free may be repaid to them. They do not count as income and will be labelled accordingly on your statement.
The capital contribution principle has applied since 1 January 2011 (Corporate Tax Reform II). However, all deposits, premiums and subsidies made after the 31 December 1996 were performed.
⚠️ Attention: These tax-free distributions must still be declared on your tax return!
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Important restriction since 2020: Since the STAF tax reform, listed Swiss companies have been subject to a Proportionality rule. Tax-free KER may only be distributed if at least the same number of taxable dividends are distributed.
Exceptions from this rule:
Capital contribution reserves can arise, for example, when shareholders pay additional money into a company - e.g. when the company issues its own shares above the nominal value (i.e. the basic value of the share). This is like a financial cushion that not comes from the company's normal profits, but was "paid in" from outside.
In principle, therefore, capital contribution reserves are not actually dividends at all, but rather a form of capitalisation. Repayment. This is precisely why they are 100% tax-free.
Unfortunately, capital contribution reserves (KER) do not only have advantages. The repayment also reduces the purchase price of your shares.
Important to understand: At each dividend, the share price on the ex-dividend date falls by the amount distributed. However, the difference lies in the tax treatment:
Example: You have paid CHF 100 per share and receive a tax-free KER of CHF 5 per share. The tax The book value of your share is then only CHF 95. If you sell your shares later for CHF 105, you would have a taxable capital gain of CHF 10 instead of CHF 5.
Of course, this also has an impact on the subsequent taxation of the capital gain - the if you are categorised as a professional trader. Fortunately, capital gains are tax-free for private investors in Switzerland.
The following examples show you distributions from 2025 with specific figures:
| Company | Distribution 2025 | Tax-free portion | More info |
|---|---|---|---|
| Holcim | CHF 3.10 per share | 100 % tax-free | https://www.holcim.com/sites/holcim/files/docs/holcim-generalversammlung-2025-einladung.pdf |
| UBS | CHF 0.74 per share | 50 % tax-free | https://www.ubs.com/global/de/investor-relations/investors/shareholder-information/dividend.html |
| SIG Group | Dividend from foreign KER | 100 % tax-free | https://www.fuw.ch/dividendensaison-hier-lockt-eine-steuerfreie-dividende-645245151465 |
| EFG International | 4.0 % Dividend yield | 100 % tax-free | https://www.cash.ch/news/top-news/diese-schweizer-dividenden-gehoren-dank-steigender-gesamtausschuttungen-in-jedes-depot-845315 |
The most important points for you as an investor:
Capital contribution reserves (KER) have been available to Swiss private investors since 2011. completely tax-free - no income tax, no Withholding tax.
Nevertheless important: You must declare these tax-free distributions in your tax return.
This is how you proceed:
💡 Tip: Most cantonal online tax programmes automatically guide you through the securities section. If you are unsure, you can also ask your bank - the type of distribution is always clearly labelled.
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Tax-free dividends in Switzerland originate from Capital contribution reserves (KER). This is not a profit distribution, but a repayment of contributions, premiums and subsidies.
The most important points:
CERs are particularly attractive for investors, as no withholding tax is payable and no income tax is due.
No guarantee that the information is up-to-date or correct.
No, normal dividends from retained earnings are always taxable. Only Repayments from capital contribution reserves (KER) are tax-free for private investors, as they are legally capital repayments.
Tax-free distributions originate from Capital contribution reserves (KER). These are contributions by shareholders that were made in the past and will be repaid at a later date.
Examples for 2025: Holcim (100% tax-free from foreign KER), UBS (50% tax-free), SIG Group (100% tax-free), EFG International (100% tax-free). The exact amounts can be found in the respective annual reports.
Yes, tax-free KER distributions must also be declared. Enter them in the "Repayment from capital contribution reserve" field.
Dividends from retained earnings are always taxable. Dividends from KER, on the other hand, are tax-free. If you are interested in the taxation of ETFs in detail, be sure to take a look at our comprehensive tax guide.
Your statement explicitly states "Repayment from capital contribution reserves" or "KER". Normal dividends are labelled "dividend" or "profit distribution".
Yes, the tax The purchase price is reduced by the KER distribution. In the event of a subsequent sale, this can increase the taxable capital gain - if you are categorised as a professional trader.
Unfortunately, there is no clear answer to this question. In principle, tax-free dividends can be worthwhile, but you have to bear in mind that there is only a limited supply of capital contribution reserves and the book value of your share will fall. For a comprehensive dividend strategy, you can find more tips in our dividend calendar Switzerland.
Domestic KER are subject to the 50:50 rule for listed companies. Foreign KER (e.g. from mergers such as Holcim) can be distributed tax-free at 100%, without a simultaneous profit dividend.
Half of the UBS dividend was tax-free in 2025. How it will turn out in 2026 remains to be seen
In 2025, the Holcim dividend was tax-free. How it will turn out in 2026 remains to be seen
Eric is the founder of Schwiizerfranke.com and certified IAF wealth advisor. Since 2019, he has been helping Swiss citizens to organise their finances comprehensibly, independently and efficiently.
📌 Note: This article is for information purposes only and does not constitute personalised investment advice.