Tax rules applicable to the real estate fund
The real estate fund has no legal personality in Switzerland. In principle, it is not subject to income tax or capital tax. Real estate funds with direct land ownership are the exception. In accordance with the Swiss Federal Direct Tax Act, income from direct land ownership is subject to taxation at the point of the fund itself, but is tax-free for unit holders. Similarly, the capital gains made on direct land ownership are only taxable for the real estate fund.
Federal withholding tax deducted from the real estate fund’s Swiss income can be reclaimed in full by the fund management company.
Distributions of the real estate fund’s income (to investors domiciled in Switzerland and abroad) are subject to a 35% federal withholding tax (tax withheld at source). The income and capital gains distributed in the form of separate coupons in respect of direct land ownership and capital gains arising from the disposal of shareholdings and other assets are not subject to withholding tax.
Investors domiciled in Switzerland may recover the withholding tax levied by listing the corresponding income in their tax return or by submitting a separate reimbursement request.
Investors domiciled abroad may request reimbursement of the federal withholding tax based on any existing double taxation agreement between Switzerland and their country of domicile. In the absence of any such agreement, this withholding tax reimbursement will not be possible.
The income distributed and/or gains made during the sale or return of units are not subject to EU taxation of savings in Switzerland.
This tax information is based on the current legal situation and practice. It is subject to changes in legislation, case law and the practices of the tax authorities.
Taxation and the other tax implications for the investor in the event of the holding, purchase or sale of fund units are subject to the provisions of the tax law of the investor’s country of domicile.