[World Tax News] Switzerland Extends Tax Exemption for TBTF Instruments and More

Editorial Team – [2026] 186 taxmann.com 275 (Article)

World Tax News provides a weekly snippet of tax news from around the globe. Here is a glimpse of the tax happening in the world this week:

1. Switzerland Extends Withholding Tax Exemption for Too-Big-to-Fail (TBTF) Instruments Until 2031

On April 30, 2026, the Swiss Federal Department of Finance announced an extension of the withholding tax exemption on interest arising from financial instruments issued by systemically important (“too-big-to-fail” or TBTF) banks.

The extension of the withholding tax exemption provisions will enable banks to continue issuing TBTF instruments in Switzerland on competitive terms, thereby supporting financial stability. However, these provisions will remain effective only until December 31, 2031. This interim extension will provide the legislature with an opportunity to adopt permanent regulations within the framework of the Federal Council’s draft legislation on banking stability. In its draft law, the Federal Council will propose the introduction of provisions with indefinite validity.

Since January 1, 2013, the Federal Withholding Tax Act has contained temporary exemption provisions for interest on TBTF instruments, such as bail-in bonds and write-off bonds. These provisions have been extended twice, most recently until December 31, 2026.

On December 19, 2025, Parliament approved the extension of the derogation provisions. As the referendum period expired unused on April 17, 2026, the extension of the exemption provisions will come into force on January 1, 2027.

Source – Dept. of Finance

2. Belgium–Liechtenstein Double Taxation Agreement Signed

On 4 May 2026, during the 8th European Political Community Summit in Yerevan, Prime Minister Brigitte Haas and Prime Minister Bart De Wever signed a Double Taxation Agreement (DTA) between Liechtenstein and Belgium.

The agreement aims to eliminate double taxation and provide a clear tax framework for individuals and legal entities engaged in cross-border activities. It is aligned with OECD international standards and incorporates the OECD/G20 BEPS Project measures to curb tax evasion and tax avoidance.

The DTA covers income and property taxes and provides that no withholding tax shall apply on intra-group dividends, inter-company loans, or royalties to encourage cross-border investment. It also contains provisions relating to asset structures, investment funds, pension funds, exchange of information, mutual assistance in tax collection, and a mutual agreement procedure with an arbitration clause for resolving complex double taxation disputes.

The agreement is expected to strengthen the economic and investment relationship between Liechtenstein and Belgium by enhancing legal certainty and promoting bilateral cooperation.

Source – Government Principality of Liechtenstein

3. Hong Kong Revenue Department Issues Individual Tax Returns for Y/A 2025/26

The Hong Kong Inland Revenue Department (IRD) issued around 2.77 million individual tax returns for the Year of Assessment (Y/A) 2025/26 on 4 May 2026. Tax returns must be filed by 4 June 2026 in general cases and by 4 August 2026 for sole proprietors, with an additional one-month extension available for electronic filing through eTAX.

The Commissioner of Inland Revenue, Benjamin Chan, highlighted the proposed concessionary tax measures under the 2025 Policy Address and the 2026-27 Budget. These include a one-off 100% reduction in salaries tax, tax under personal assessment, and profits tax for Y/A 2025/26, subject to a ceiling of $3,000 per case, along with enhanced tax allowances and deductions effective from Y/A 2026/27.

The IRD also encouraged taxpayers to use eTAX services and noted the expansion of electronic tax filing facilities, including mandatory electronic filing of profits tax returns for relevant multinational enterprise group entities from Y/A 2025/26 onwards.

Source – Inland Revenue Department

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