tax-free dividends switzerland receive dividends tax-free tips 2026

Tax-free dividends in Switzerland: what you need to know

As a Swiss investor, you have probably already come across the topic of Tax-free dividend stumbled - especially if you are looking for a Dividend strategy sets. Sounds pretty attractive at first glance, doesn't it?

What exactly you should consider with tax-free dividends, current Examples and how you can use them for yourself in this article.

Table of contents

Tax-free dividends - how does it work?

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.

Capital contribution reserves - Tax-free dividend

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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50:50 rule for listed companies

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:

  • Distributions to major shareholders (at least 10% stake)
  • Foreign capital contribution reserves (e.g. from cross-border mergers)
  • Liquidation or exit distributions

 

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.

Reduction in the purchase price of shares through tax-free dividends

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:

  • Normal dividend: Share price falls → you pay taxes → more fiscal Cost price remains unchanged
  • KER distribution: Share price falls → no taxes → more fiscal Cost price is reduced by the distribution

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.

Current examples: Shares with tax-free dividends

The following table shows you current examples of Swiss shares with tax-free dividends:

Group 1: 100% tax-free dividends

CompanyDividendTax-free portionSource of tax exemptionDuration
HolcimCHF 3.10 (FY 2024)100% tax-freeForeign KER (Lafarge)Approx. 2029-2032
SunriseCHF 3.42 (FY 2025)100% tax-freeForeign KER (IPO)Approx. 5 years
EFG InternationalCHF 0.63100% tax-freeNo retained earningsAs long as no retained earnings
Landis+GyrCHF 1.50100% tax-freeNegative retained earningsAs long as negative reserves
ClariantCHF 0.42100% tax-freeNominal value repaymentA few more years
SIG Group⚠️ SUSPENDED (FY 2025)100% tax-freeForeign KERPlanned again from FY 2026

Group 2: Partially tax-free dividends (50:50 rule)

CompanyDividendTax-free portionSource of tax exemptionDuration
UBSUSD 1.10 (FY 2025)50% tax-freeDomestic KER20+ years
LonzaCHF 4.0050% tax-freeDomestic KERApprox. 15 years
SIKACHF 3.6050% tax-freeDomestic KERSeveral years

Status: February 2026 | Next update: after the GM season (April/May)

Tax declaration of tax-free dividends

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.

Declare capital contribution reserves

This is how you proceed:

  1. Recognise KER distributions: Your custody account statement says "Repayment from capital contribution reserves" (not "Dividend")
  2. In the tax return: Search for the field "Repayment from capital contribution reserve" or "Tax-free distributions"
  3. Enter the amount: Enter the gross amount - even if tax-free

 

💡 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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Conclusion on the topic of tax-free dividends in Switzerland

Tax-free Dividends in Switzerland come from Capital contribution reserves (KER). This is not a profit distribution, but a repayment of contributions, premiums and subsidies.

The most important points:

  • KER are for Swiss private investors 100% tax-free
  • Since 2020, listed companies have been subject to the 50:50 rule (Exception: foreign KER)
  • Declaration obligation remains in the tax return
  • The Cost price for tax purposes of your shares is reduced

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.

FAQ on tax-free dividends

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.

The best-known examples include Holcim (100% from foreign CERs), UBS (50% from domestic CERs), Sunrise (100% from foreign CERs), EFG International (100%, no retained earnings) and Clariant (nominal value reduction). You can find the current overview in the table above.

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 is tax-free - 50% comes from domestic capital contribution reserves (KER). As UBS has around 20 years' worth of CER reserves, this is likely to continue for a long time to come.

Yes, 100% of the Holcim dividend is tax-free - it comes entirely from foreign capital contribution reserves (Lafarge merger). According to analysts, the reserves will last until around 2029-2032.

Financial author Eric Marschall certified investment advisor (IAF) independent financial expert Switzerland - certified financial expert switzerland
About the author

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.

More about Eric & Schwiizerfranke

📌 Note: This article is for information purposes only and does not constitute personalised investment advice.

3 responses

  1. Hi, Eric,
    Thanks for the information.
    I'm a foreign investor and I'm looking to invest let's say in Sika (50% rule tax free dividend).
    If I invest through Interactive Brokers, is Sika on charge to apply withholding tax, right? Does it tax according to investor nationality or tax free dividend is only for Swiss investors?

    Kind regards,
    Pablo

    Reply

  2. Hello Eric
    I would like to invest in shares with dividends. I have a custody account with „Plus500“ and a leverage of 1:20 for various shares.
    But now I'm wondering whether I can get in just before the dividend payout, collect the dividend and then sell again, or whether I have holding periods?
    I have to pay tax anyway, I'm not interested in that, just the purchase and sales period!
    Greetings, Andreas

    Reply

    1. Hello Andreas
      Thank you for your comment! First of all: Plus500 is a CFD broker - you don't buy real shares there, but trade in leveraged products. This means that you generally don't receive any real dividends. With CFDs, the dividend is often credited as an adjustment, but with a leverage of 1:20 you are taking an enormous risk that has nothing to do with long-term dividend investing.
      On the idea of «buy shortly before, collect dividend, sell again»: Unfortunately, this doesn't work because the share price falls by the exact amount of the dividend on the ex-dividend date. You get the payout, but your position loses the same amount - a zero-sum game, even a minus transaction after fees and taxes.
      If you want to invest with dividends in the long term, I would recommend a regular Swiss broker where you buy real shares or ETFs - without any leverage. In the Broker comparison you will find suitable providers.
      Best regards
      Eric

      Reply
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