Reclaiming US withholding tax: W-8BEN and DA-1

• Foreign persons are generally taxed at 30% on US dividends.
• For Swiss residents, the double taxation treaty reduces the rate to 15%. The 5% rate applies only to companies holding at least 10% of the voting rights.
• For the treaty rate to apply, the paying agent must have a Form W-8BEN before the payment.
• The 15% can be credited in Switzerland, for individuals using form DA-1. The condition: the non-refundable foreign taxes must exceed CHF 100 in total. The credit is at most the Swiss tax on that income.
• A Swiss bank with QI status withholds an additional 15%, the "additional US retention" (zusätzlicher Steuerrückbehalt USA). It is refunded or set off in the same way as the Swiss withholding tax.
• If the full 30% was deducted, the difference can only be reclaimed in the United States.

You can work through your own case with the US withholding tax calculator.

Assume a US share pays you a gross dividend worth CHF 2,000.

In the second and third case the same amount lands in your account at first. The difference is the way back: with the Swiss bank you recover the additional CHF 300 through your tax return; without a W-8BEN at a broker abroad, only through a US tax return.

In all three cases at most the 15% that remains in the US under the treaty is creditable. Whether that becomes the full CHF 300 depends on the maximum amount (see below).

• What for: with the W-8BEN, individuals inform the payer of the dividend that they are entitled to treaty benefits. According to the IRS, without the form the withholding agent "may have to withhold at the 30% rate".
• When: before the payment. The SIF country sheet says: before the first payment falls due.
• To whom: to the broker or paying agent, not to the IRS. "Generally, a separate Form W-8BEN must be given to each withholding agent", so as a rule one form for each broker.
• How long: from the date it is signed until the last day of the third succeeding calendar year, unless a change in circumstances makes any information on the form incorrect. The IRS example: signed on 30 September 2015, valid through 31 December 2018. A form signed in 2026 is therefore valid until 31 December 2029.
• US persons: anyone who counts as a US person, such as a US citizen living in Switzerland, completes Form W-9 instead. According to the ESTV notice, no additional retention is levied for these persons.

Saxo Bank (Schweiz) shows how a provider handles this: clients resident in Switzerland with Swiss nationality benefit from the US withholding tax relief automatically; those resident in Switzerland without Swiss nationality need a valid W-8BEN. Without valid documents, Saxo says, the standard US withholding tax of up to 30% applies. Swissquote states on its QI page that without the required documentation, US income is taxed at the uniform rate of 30%.

A Swiss "Qualified Intermediary" that receives US dividends on behalf of others at 85% of the gross amount, that is after the 15% treaty tax, must retain a further 15% of the gross dividend for clients resident in Switzerland. If it receives 95%, the retention is 25% (ESTV notice S-02.142, section 1.1). Saxo Bank (Schweiz) accordingly states that the US withholding tax deducted from dividends includes the 15% additional US retention.

This amount is not lost. According to the SIF country sheet it is either refunded or credited against Swiss taxes in the same way as the federal withholding tax.

• Claim: individuals request the refund or set-off with form R-US 164 (or 161, or in the Wertschriftenverzeichnis set up for it) at the cantonal tax administration, usually with the tax return.
• Evidence: the bank must issue a dated statement showing, among other things, the amount retained in Swiss francs. The original statements or an equivalent consolidated statement go with the claim.
• Deadline: three years after the end of the calendar year in which the dividend fell due.
• Forfeiture: anyone who does not declare the reduced dividends, or the assets that produce them, loses the claim.

Notice S-02.142 dates from March 2001 and is still on the ESTV's list of notices; the SIF country sheet for the United States is dated 1 January 2020.

Switzerland grants a credit for the reduced US withholding tax on dividends. For individuals it runs through form DA-1, the supplementary sheet to the Wertschriftenverzeichnis for the credit of foreign withholding taxes.

1. 1Which income: foreign dividends and interest that remain subject to a limited, non-refundable tax in the source country. Income with no withholding tax, or with a fully refundable one, belongs in the ordinary Wertschriftenverzeichnis.
2. 2Where and when: in the canton where you lived on 31 December of the year, together with the tax return and the Wertschriftenverzeichnis. Attach bank certificates and evidence of the foreign tax withheld.
3. 3Declare gross: anyone claiming the credit must tax the foreign income at its gross amount, without deducting the tax levied in the source country.
4. 4CHF 100 threshold: if the non-refundable foreign taxes do not exceed CHF 100 in total, no credit is granted (more on this in the next section).
5. 5Maximum amount: the credit is at most the Swiss income tax on that income. It is calculated on the net income, after a pro-rata share of debt interest and costs, separately for the Confederation and for the canton and municipality; church taxes do not count. In the example in ESTV notice DA-M, a gross dividend of CHF 2,410 produces residual tax of CHF 361.50 but a maximum amount of only CHF 140.10, and CHF 140.10 is credited.
6. 6Deadline: the claim lapses if it is not filed within three years after the end of the tax period in which the income fell due.

A rough estimate of the maximum amount: at an assumed marginal tax rate of 10%, the Swiss tax on a CHF 2,000 dividend is at most about CHF 200, which is less than the CHF 300 of US tax. At most CHF 200 would then be credited. Because the exact calculation first deducts a share of debt interest and costs, the actual maximum amount tends to be lower.

A note on how this fits with a Swiss bank: form DA-1 has a line of its own for deducting US dividends whose securities and income have already been declared on the supplementary sheet for the USA. If in doubt about which sheet an item belongs on, ask your canton's tax administration; it is responsible for assessing individuals.

The CHF 100 threshold applies to the non-refundable foreign taxes in total, across all countries and securities together. Someone with only US dividends crosses it, at the 15% rate, only above roughly CHF 666.67 of dividends (CHF 100 divided by 15%).

Example: CHF 500 of US dividends produces CHF 75 of non-refundable tax. That does not exceed CHF 100, so no credit is granted. You then list the dividend in the ordinary Wertschriftenverzeichnis at the amount reduced by the withholding tax, that is CHF 425.

If non-refundable taxes from other countries come on top, the total counts. If it is above CHF 100, the credit is available.

If the paying agent has no valid W-8BEN, it may withhold 30%. You cannot then recover the second 15% through your Swiss tax return. The SIF country sheet is unambiguous: if the full US taxes have been deducted from US income, the refund can only be claimed in the United States. For individuals that means a US tax return on Form 1040-NR filed with the IRS. According to the country sheet, refunds by the United States are generally limited to 3 years.

In practice: file the W-8BEN before the first dividend falls due, and renew it before it expires.

Swiss dividends and interest work in a similar way, but with a different rate and a different outcome. The Confederation levies 35% withholding tax (Verrechnungssteuer) on income from movable capital of Swiss debtors, in particular dividends and interest.

Individuals resident in Switzerland get it back if they have properly declared the assets and the income earned on them in their tax return. The claim is a form that also serves as the Wertschriftenverzeichnis and is filed with the tax return. The canton makes the refund, usually by setting it off against the cantonal tax bill. The deadline is three years after the end of the calendar year in which the payment fell due.

Example: from a CHF 1,000 Swiss dividend, CHF 350 of withholding tax is deducted and CHF 650 paid out. The CHF 350 comes back through the Wertschriftenverzeichnis.

The difference from US withholding tax: Swiss withholding tax is refunded in full if properly declared. The 15% US treaty tax, by contrast, is only credited, at most up to the Swiss tax on the income, and only if the CHF 100 threshold is exceeded.

How providers handle tax statements and withholding tax is shown per provider on the page brokers for investors in Switzerland, for example at Saxo Bank or Swissquote. For the stamp duty on purchases, read Swiss stamp duty on securities trades.

• IRS, Instructions for Form W-8BEN (Rev. October 2021)
• IRS, Tax Treaty Table 1 (Rev. May 2023), row "Switzerland"
• SIF/ESTV, Länderblatt Vereinigte Staaten von Amerika, Stand 1. Januar 2020
• ESTV, Merkblatt S-02.142, Zusätzlicher Steuerrückbehalt (March 2001)
• ESTV, Formular DA-1, tax period 2025
• ESTV, Merkblatt DA-M über die Anrechnung ausländischer Quellensteuern
• ESTV, Geltende Steuern, Stand der Gesetzgebung 1. Januar 2026, section 2.2.2 (Verrechnungssteuer)
• Saxo Bank (Schweiz), Quellensteuer
• Swissquote, Qualified Intermediary

This article is for information only and does not constitute investment, legal or tax advice.