Switzerland And Norway Revise DTA

by Ulrika Lomas, Tax-News.com, Brussels

15 June 2009

The Swiss government has agreed to revise the existing treaty with Norway on double taxation, to include administrative assistance in tax matters under Article 26 of the Organization for Economic Cooperation and Development's Model Convention. The tax authorities of both countries initialled a revised double taxation agreement, (DTA), in Oslo. Norway is the third country to initial an agreement with Switzerland with the extended administrative assistance clause.

This document will be submitted to the Swiss cantons and relevant business associations for comment. It will then be submitted to the governing Federal Council, which will decide on the authorisation for signing. After the DTA has been signed, the Federal Assembly must approve it before it can come into force. In the view of the Federal Council the first double taxation agreement approved by parliament with the new administrative assistance provisions may be subject to an optional referendum in line with established practice. However, the decision on making a DTA subject to a referendum rests with parliament.

The Federal Council decided in March 2009 that Switzerland would change policy on international cooperation in tax matters and adopt the OECD standard on administrative assistance in tax matters under Article 26 of the OECD Model Convention. The decision will permit an exchange of information on tax matters in individual cases where a specific and justified request has been made. The Federal Council instructed the Federal Department of Finance to enter into immediate negotiations on the revision of the DTAs with the USA and Japan and then with other OECD and EU States.

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