3 octobre 2024 – The Swiss Federal Supreme Court resolved a new lead case as to beneficial ownership in interest payments received by an International Financial Institution on Swiss bonds held. Beneficial ownership of the International Financial Institution was upheld although it had entered into a combined currency and interest rate swap arrangement with other International Financial Institutions. The entering into and the unwinding of the swap arrangement was lined up with the investment in and the residual term of the Swiss bonds held up to maturity.

As the International Financial Institution had to make payments under the swap arrangement even though it had not received any interest and principal payments from the Swiss bonds held, the Court ruled that the swap arrangement had no impact on the beneficial ownership of the International Financial Institution. Furthermore, the Court made it clear that the beneficial ownership concept on one hand and the question of abusive tax avoidance on the other hand were two independent issues subject to two separate tests to be applied, respectively.

Thomas Meister, Maurus Winzap, Marius Breier and Robert Desax of the Walder Wyss Tax Team advised the client in this first successful “Beneficial Ownership” case brought to the Swiss Federal Supreme Court and ruled in favour of the taxpayer.