Dividend
A dividend is the distribution of a corporation’s profit to its shareholders; it requires a resolution of the general meeting, a distributable profit and the creation of the statutory reserves.
Definition
Unlike salary, a dividend carries no social insurance contributions — the reason it is attractive in one-person companies, and the reason the authorities look at the ratio between salary and dividend. An inappropriately low salary can be partly reclassified as salary.
For the recipient it is subject to withholding tax and partially taxed in private assets where a qualifying participation of at least ten per cent exists. Partial taxation compensates for the prior burden of profit tax.
The numbers
- 10%
- participation share from which partial taxation of the dividend applies Art. 20 para. 1bis DBG
Where to read it
- Swiss Code of Obligations (SR 220)
- Federal Act on Direct Federal Taxation (SR 642.11)
- Withholding Tax Act (SR 642.21)
What the software must be able to do
Check whether the software knows equity movements — profit appropriation, allocation to reserves, dividend resolution and distribution. In simple programs the area is missing, and year end happens at the fiduciary.
Checked Aug 2026
More terms under Company taxes: Anticipatory tax (Verrechnungssteuer) Capital contribution principle Capital tax Direct federal tax Profit tax