Swiss, Uruguay DTA Enters Into Force

by Ulrika Lomas, Tax-News.com, Brussels

02 January 2012

The Swiss Federal Department of Finance (FDF) has announced that following the diplomatic exchange of notes on December 28, 2011, the double taxation agreement (DTA) between Switzerland and Uruguay entered into force.

According to the FDF, the DTA contains provisions on the exchange of information in accordance with the international standard applicable at present and will serve to contribute to the further positive development of bilateral economic relations.

The Swiss FDF states that: “Aside from the exchange of information, Switzerland and Uruguay have agreed that dividends will be taxed at 15% in the source state. So long as companies have a stake of more than 25% in the company making the payment, dividends will be taxed at 5% in the source state.”

It adds: “Furthermore, it has been negotiated that the state of residence has the right of taxation concerning interest payments and that the source state can tax interest payments at 10%. Interest in connection with sales on credit will be exempt from tax.”

It ends: “There will be no withholding taxes, even on interest on long-term bank loans. Royalties will be taxed solely in the state of residence of the payment recipient, so long as Switzerland does not levy withholding tax on royalties.”

The provisions of the agreement will apply from January 1, 2012.

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