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Michael Dettwiler
Since January 1, 2023, there has been an important change in Swiss company law: companies can distribute an interim dividend to their shareholders. This gives companies a more flexible option for distributing profits to shareholders without necessarily having to wait until the next Annual General Meeting.
What is an interim dividend?
An interim dividend is a distribution of profits within the current financial year, i.e. before the annual financial statements are available and have been approved by the Annual General Meeting. Previously, distributions were only permitted after the annual financial statements had been approved. With the new regulation, companies can now also pay dividends during the year, for example after a successful half-year.
Legal basis since 2023
The interim dividend was introduced as part of the revision of company law, which came into force on January 1, 2023.
The distribution of an interim dividend is subject to the following conditions
- interim financial statements, which form the basis for the calculation,
- an audit of these interim financial statements by the auditors (if the obligation to audit the annual financial statements exists (or if all shareholders have approved the interim dividend, then no audit is required).
- a resolution by the Annual General Meeting, as only the Annual General Meeting may decide on the appropriation of net retained profits.
This ensures that the rights of creditors are safeguarded even in the case of distributions during the year and that the distribution is made on a solid basis.
Advantages for companies and shareholders
The possibility of interim dividends has various advantages:
- Flexibility: Companies can react to good business development and pass on profits to shareholders promptly.
- Attractiveness for investors: Regular or additional dividends can make a company more interesting for investors.
- Planning security for shareholders: Institutional investors in particular appreciate predictable distributions, even during the year.
- Tax optimization: Shareholders can defer their distributions between years in order to smooth out progression or carry out tax planning.
Strategic importance for companies
The option of distributing an interim dividend can also be part of a long-term distribution policy. Companies can allow their shareholders to regularly participate in their success and thereby strengthen confidence in the stability of the company. At the same time, such a distribution signals a healthy financial and liquidity situation. For listed companies in particular, the introduction of interim dividends can be an important step towards positioning themselves better in the competition for investors.
Important points in practice
Companies should consider the following when introducing interim dividends:
- The interim financial statements must be prepared in accordance with recognized accounting standards.
- The General Meeting remains authorized to make decisions, not the Board of Directors alone.
- Liquidity check (basic requirement)
- Compliance with the formal framework conditions and free reserves: Only what can actually be distributed may be distributed.
- Careful liquidity planning is crucial to ensure that the distribution does not lead to financial bottlenecks.
Conclusion
The interim dividend, which has been possible since January 1, 2023, is a welcome addition to Swiss company law. It allows companies to distribute their profits promptly and at the same time makes them more attractive to investors. This provides companies with a modern instrument that creates more flexibility. However, this is subject to clear legal framework conditions.
However, please note that caution is also advised with regard to social security law. Dividends exceeding 10% of the taxable value may be reclassified as wages subject to AHV contributions if there is a disproportion between wages and work performance.
