Switzerland has extended the withholding tax exemption provisions applicable to instruments issued by financial institutions classified as too big to fail.
Switzerland has extended the withholding tax exemption provisions applicable to instruments issued by financial institutions designated as too big to fail (TBTF) for a fixed period until 31 December 2031.
This announcement was on 30 April 2026.
The extension ensures that banks can continue to issue TBTF instruments in Switzerland on competitive terms, thereby supporting the strengthening of financial stability. This transitional period is intended to allow the legislator to establish a permanent regulatory framework under the Federal Council’s banking stability bill. In its proposal, the Federal Council will recommend introducing provisions of unlimited duration.
The Federal Act on Withholding Tax has included temporary exemption provisions for interest on TBTF instruments, such as bail-in bonds and write-off bonds, since 1 January 2013. These provisions have already been extended twice, most recently until 31 December 2026.
Parliament approved the latest extension on 19 December 2025. Following the expiry of the referendum period on 17 April 2026 without any challenge, the extension will enter into force on 1 January 2027.
