# Avoiding withholding tax in Switzerland: Optimization opportunities with Malta as a holding location

> Dr. Werner & Partner - International Law Firm in Malta
> URL: https://www.drwerner.com/en/avoiding-withholding-tax-in-switzerland-optimization-opportunities-with-malta-as-a-holding-location/

## Metadata

- **Author:** Susan Meier
- **Published:** 2025-03-24
- **Updated:** 2026-02-26
- **Topic:** Steuerplanung
- **Jurisdictions:** International
- **Reading time:** 2 min

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## **What is withholding tax in Switzerland?**

Switzerland levies a **withholding tax of 35%** on dividends, interest and certain license income. This tax is deducted directly at source before the income is paid out to the recipient.

The high withholding tax can often be optimized through **double taxation agreements (DTAs)** or a suitable **holding structure**.

**How can you avoid withholding tax in Switzerland?**

A **holding structure in Malta** is a proven strategy to **avoid or significantly reduce** withholding tax on **dividends from a Swiss company**.

## **Why Malta as a holding location?**

Malta offers a **particularly attractive tax regime** for holding companies and is a **member of the EU**, which offers additional legal protection.

## **The Maltese tax model**

- Companies in Malta are subject to corporation tax of **35%**.
- However, shareholders can apply for a **tax refund of 6/7** of the tax paid.
- This reduces the effective tax burden to **just 5%**.
- Furthermore, Malta **does not** levy **withholding tax on dividends** that are distributed abroad.

## **How does the avoidance of withholding tax in Switzerland work with a Malta holding company?**

1. **Schweizer AG pays dividends to the Malta holding company**
2. 
  - Thanks to the **double taxation agreement (DTA Switzerland – Malta)**, the withholding tax can be reduced from 35% to **5% or even 0%**.
3. **The Malta holding company only pays an effective 5% tax**
4. 
  - The holding company applies for a **tax refund** in Malta and thus reduces its tax burden.
5. **Tax-optimized distribution of profits**
6. 
  - The remaining profits can **be distributed to the shareholders in a tax-optimized manner or reinvested**.

## **Advantages of a Malta holding company for Swiss entrepreneurs**

- **Reduction or avoidance of Swiss withholding tax on dividends**
- **Effective tax burden of only 5% in Malta**
- **Legal certainty through the DTA Switzerland-Malta**
- **No withholding tax on dividend distributions from Malta to other countries**
- **Flexible capital management and reinvestment of profits**

## **Conclusion: Avoidance of withholding tax for Swiss companies with a Malta holding company**

A **Malta holding company is an effective strategy to avoid the high Swiss withholding tax.** Thanks to the **double taxation agreement** and the advantageous **5% taxation in Malta**, Swiss entrepreneurs can significantly reduce their tax burden.

In order to ensure a **legally compliant and tax-optimized structure**, it is advisable to seek advice from experts who are familiar with international holding structures.

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## Contact

- **Telefon:** +356 213 777 00
- **Book appointment:** https://www.drwerner.com/en/contact/
- **Website:** https://www.drwerner.com/en/avoiding-withholding-tax-in-switzerland-optimization-opportunities-with-malta-as-a-holding-location/

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