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642.21 VSTGLIALIP CH

Art. 4a Federal Act of 13 October 1965 on Withholding Tax (WTA)

LIA; Chapitre 1 Perception de l’impôt anticipé; A. Objet de l’impôt; I. Revenu de capitaux mobiliers; 1a. Acquisition de ses propres droits de participation
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Art. 4a LIA

A corporation or cooperative society that acquires its own participation rights (shares, limited liability company shares, cooperative shares, cooperative bank participation certificates, participation or jouissance certificates) pursuant to a decision to reduce its capital or with the intention to do so is liable for withholding tax on the difference between the acquisition price and the nominal paid-up value of these rights. The same applies when the acquisition exceeds the scope of Art. 659 or Art. 783 of the Swiss Code of Obligations (CO).

Paragraph 1 applies by analogy to a corporation or cooperative society that has acquired its own participation rights according to Arts. 659 or 783 CO and does not subsequently reduce its capital nor resell these rights within a period of six years.

If the corporation or cooperative society acquires its own participation rights within the scope of commitments arising from a convertible or option loan or an employee participation plan, the resale period set in para. 2 is suspended until the extinction of these commitments, but not longer than six years for employee participation plans.

Corporations and cooperative societies that are listed on a Swiss stock exchange must, upon acquiring their own participation rights according to paras. 1 to 3, charge at least half of the liquidation surplus to the reserves from contributions, agios, and additional payments (reserves from capital contributions). If this condition is not met, the amount of reserves from capital contributions is adjusted accordingly, but not exceeding the available reserves from capital contributions.

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Court Decisions Applying This Provision (8)

SB.2022.00006 · zh (§ 4a Abs. 2 VStG)
Tax Treatment of Share Repurchase Differences in Employee Participation Programs
This provision is listed as a relevant legal norm in the context of the dispute.
SB.2016.00117 · zh (Art. 4a VStG)
Holding Company's Shares: Taxable Capital Adjustment Disallowed
This provision is discussed as a potential correction norm for taxable equity, but the court ultimately finds it does not allow for the adjustment in this case.
A-4934/2013 (Art. 4a Abs. 2 VStG)
Company Tax Liability for Overheld Repurchased Shares
The provision establishes the condition for a deemed partial liquidation (and thus the creation of a withholding tax claim) if a company holds its own shares for longer than six years without reselling them.
HC.2013.310 · vd (Art. 4a al. 1 LIA)
Share Sale Agreement Validity and Withholding Tax Liability
Cited as the basis for why the anticipation tax should have been withheld from the gross price.
A-4285/2007 (Art. 4a Abs. 1 VStG)
Deemed Partial Liquidation and Withholding Tax Liability Due to Overholding of Own Shares
This provision establishes that the difference between the purchase price and the nominal value of own shares, or shares acquired beyond the limits set by law, are subject to withholding tax, forming the basis for the court's decision.
A-4084/2007 (Art. 4a Abs. 1 VStG)
Pension Funds v. Tax Authority: Tax Avoidance Through Share Repurchases
Governs the taxation of the difference between the purchase price and the nominal value when a company acquires its own shares in view of or for the purpose of capital reduction.
VPB 97-022 (Art. 4a LIA)
Swiss Corporate Tax Reform for Economic Competitiveness
Regulates the taxation of stamp duty on the acquisition of own participation rights by companies.
SB.2016.00117 · zh (Art. 4a VStG)
Holding Company's Negative Equity Recognized for Tax Purposes
Cited by the tax authority as a correction norm for profit and capital tax, but ultimately not applied in the final decision.