Swiss, Chilean DTA Enters Into Force

by Ulrika Lomas, Tax-News.com, Brussels

04 June 2010

The Swiss government has announced the entry into force of a convention for the avoidance of double taxation and fiscal evasion with respect to taxes on income and assets with Chile, following the notification of ratification by the Chilean government.

The agreement contains provisions to prevent the double taxation of individuals and businesses engaged in economic activities between the two countries. In particular, the DTA will improve legal protection for companies and reduce the withholding tax on dividends, interest and royalty payments paid.

The agreement was signed in Santiago on April 2, 2008. In accordance with Swiss practice at the time, it contains an article that provides for the exchange of information for applying the agreement and enforcing domestic law in the case of tax fraud. Consequently, extended administrative assistance in accordance with the Organization for Economic Cooperation and Development standard was not agreed with Chile.

According to the Swiss government, both contracting countries wish to bring the agreement into effect as soon as possible and have, for this reason, dispensed with resuming negotiations on extending administrative assistance.

The provisions of the agreement will apply in Switzerland to revenues, assets and withholding tax effective from January 1, 2011.

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