SIX Securities Services to tackle tax reclaim 24 November 2016Zurich Reporter: Stephanie Palmer
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SIX Securities Services has partnered with tax consultancy and software developer Confinale to create a new Tax Reclaim Service, and secured Raiffeisen Switzerland as its first pilot client.
The service is intended to help banks and investors to manage double taxation on interests and dividends from shares in foreign companies.
These taxes are deducted at source and transferred to the foreign tax authorities, however investors then have to pay income tax on the remaining amount, meaning dividends are taxed twice.
According to the Swiss Federal Tax Administration, of a CHF 29 billion (€27 billion) surplus in withholding tax paid in 2015, only CHF 22 billion (€20.5 billion) was reclaimed.
SIX attributed this disparity partly to complex, country-specific and opaque reclaim processes.
The new solution will launch on 1 January 2017, and is intended to provide an efficient, transparent and cost-effective solution for reclaiming withholding tax.
An additional new tax offering will also include an expanded database of tax information, automatic data enrichment, client- and country-specific tax reports and audit reporting.
Gabriela Ziltener, head of investment products at Raiffeisen Switzerland, said: "Using this new service we will enable our customers to reclaim tax efficiently and at no cost and thereby to optimise their income. The Tax Reclaim Service will be available to individuals and legal entities with their tax domicile in Switzerland or abroad."
Roland Staub, partner at Confinale, added: "The fact that one of the most respected providers of infrastructure and services in the Swiss financial sector has asked us to contribute our knowledge and our industry-leading software solution to its tax service offering makes us very happy and provides confirmation for the strategy we have chosen to pursue.”
According to SIX, the launch is part of a strategic objective to improve cooperation infrastructure to help banks reduce their operating costs.
Valerio Roncone, head of markets and clients at SIX Securities Services, said: “In our function as Switzerland’s central financial market infrastructure provider, we make a substantial contribution to the financial success of the Swiss financial centre. We take responsibility for laborious and often redundant back-office functions so that banks can focus more on their core businesses.”
“The aim of this new service is to generate sustainable cost savings for our clients and tap into additional potential for optimising returns.”
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