A Swiss parent holding 25% or more for two years already receives EU dividends at 0% under Article 9 of the Swiss–EU agreement, so a holding for tax alone rarely pays. It pays for stakes between 10% and 25%, for EU co-investors, and above all for asset managers and banks, which have no EU passport. Buying Swiss companies through an EU holding carries the old reserves trap.
A Swiss parent already gets a lot without an EU holding
Switzerland is not in the EU, but its agreement with the EU on the exchange of tax information carries an old promise: under Article 9, dividends between a Swiss company and an EU company are free of withholding tax when one holds at least 25% of the other for two years and both are ordinary taxpayers. Interest and royalties between associated companies get the same treatment. A Swiss group with solid stakes in EU subsidiaries can collect their dividends directly, at 0%, in all 27 member states.
So for many Swiss groups the tax case for a Luxembourg or Dutch holding is weak. The strong cases are elsewhere: smaller or younger stakes, EU co-investors, and above all financial services, where Switzerland has no access to the EU market.
An EU holding
The EU Parent-Subsidiary Directive starts at 10% in most states; Article 9 needs 25% and two years.
Luxembourg
No EU passport for Swiss managers; AIFMD II applies since April 2026.
An EU entity
CRD VI requires an EU branch or subsidiary for EU clients from January 2027.
Often none
Article 9 already gives 0%; a foreign layer adds cost.
Article 9 in practice
- 25% for two years. A direct holding of at least 25%, kept for at least two years. The EU directive, by comparison, starts at 10% in most member states.
- Both companies taxable. Capital companies, subject to corporate tax without exemptions, neither resident in a third country under a treaty.
- Anti-abuse still applies. Each member state keeps its own rules. The Swiss Federal Supreme Court denied 0% in 2020 to an Irish holding with no staff or premises, citing the EU's Danish beneficial-ownership cases.
- Not touched by Bilaterals III. The package signed in March 2026 covers market access, not tax. Parliament is debating it now; a referendum is expected in 2027 or 2028.
For a Swiss group, the question is not how to reach 0% on dividends. It is how to reach European clients, investors and regulators.
How Switzerland taxes the European income
| Question | The answer in 2026 |
|---|---|
| Corporate tax | About 11.7% to 20.5% combined, depending on the canton |
| Dividends from subsidiaries | Participation deduction at 10% or CHF 1m: a proportional tax reduction, not an exemption; financing and admin costs reduce it |
| Capital gains | Relief for stakes of 10% held at least one year, on the gain above cost |
| Pillar Two | Swiss minimum tax since 2024, income inclusion rule since 2025, no UTPR |
| What is coming | A move to a direct participation exemption is under consultation until October 2026, with a bill by 2029 |
| Dividends from a Luxembourg or Dutch holding to the Swiss parent | 0% under their domestic exemptions (10% / 12 months in Luxembourg, 5% in the Netherlands) or Article 9 |
Switzerland is not on the Dutch list of low-tax jurisdictions, so the Dutch 25.8% conditional withholding tax does not apply to Swiss parents.
Do you need an EU holding?
Five questions, one honest answer.
Do you need an EU holding?
Five questions. The check says “stay in Switzerland” when that is the right answer.
Where Switzerland needs Europe most
Swiss financial firms have no passport into the EU. The Commission never activated the AIFMD passport that ESMA recommended for Switzerland in 2015, and AIFMD II, in force since 16 April 2026, tightens marketing by non-EU managers without one. Swiss managers therefore run EU funds through a Luxembourg AIFM or management company, usually an SCSp or RAIF with delegation of portfolio management back to Zurich or Geneva.
Banks face a harder deadline: from 11 January 2027 the EU's CRD VI requires third-country banks to serve EU clients through an authorised EU branch or subsidiary, with narrow exceptions for reverse solicitation, MiFID services and intragroup business.
If the EU holding buys Swiss companies
Swiss withholding tax is 35%. An EU parent can get 0% under Article 9, but the Swiss tax administration applies the old reserves practice: when a Swiss company is bought by someone with a better refund position than the seller, the reserves that existed at the purchase stay subject to the seller's residual rate, with no time limit. The Federal Supreme Court also denies relief to EU holdings without real substance.
Pay out the reserves before the sale, adjust the price, or keep the Swiss companies under the Swiss parent.
25% and two years already give 0% on EU dividends.
The EU directive starts where Article 9 stops.
No passport: EU funds, AIFMs and banks need an EU base.
Buying Swiss companies through an EU holding has a hidden cost.