Tax Treaty Case Law around the Globe 2025

1. Introduction

The last two decades saw a flurry of litigation in Swiss courts over beneficial ownership and treaty abuse. In this period, the Swiss Supreme Court handed down several seminal decisions on these issues. In November 2005, it became the first (supreme) court worldwide to accept that benefits under a tax treaty could be denied on the grounds of an abuse of rights. The court made national headlines approximately ten years later with two pivotal judgments in which it dealt with the impact of total return swaps and index futures on the right to refunds of Swiss dividend withholding tax. It ruled in favour of tax authorities, finding that the arrangements in question had deprived the recipient of beneficial ownership. Subsequent cases turned on the same issue regarding securities lending and borrowing transactions as well as other derivative agreements, all ending in defeat for the taxpayers.

S. 56It was not until 2024 that the court was afforded another opportunity to revisit the issues of beneficial ownership and treaty abuse, albeit under somewhat novel circumstances. Whereas previous cases had always involved applications for refunds of dividend withholding tax (WHT), this ti...