Court Rulings on Dividend Stripping and Denial of Swiss Tax Treaty Benefits

Two recent judgments by the Swiss Federal Supreme Court concerned Danish resident banks that were denied refunds of Swiss withholding taxes on dividends derived from Swiss publicly traded shares on grounds of lacking beneficial ownership, even though the applicable former Denmark-Switzerland Income and Capital Tax Treaty (1973) did not explicitly mention such a requirement. The Supreme Court overruled the decisions of a lower court granting treaty benefits to the banks.