Switzerland And Turkey Initial DTA

by Ulrika Lomas, Tax-News.com, Brussels

05 November 2009

It has recently emerged that Switzerland and Turkey have initialled a new double taxation agreement (DTA), extending administrative assistance in tax matters in accordance with the OECD (Organisation for Economic Cooperation and Development) standard.

Following the Swiss Federal Council’s decision on March 13, 2009 to extend administrative assistance in tax matters in accordance with Article 26 of the OECD Model Convention, Switzerland has already negotiated and initialled fifteen DTAs containing the extended administrative assistance clause.

Agreements with Denmark, Luxembourg, France, Norway, Austria, the United Kingdom, Mexico, Finland, the Faeroe Islands, the US, Spain and Qatar have already been signed, and the signature of renegotiated and initialled agreements with the Netherlands, Poland and Japan is envisaged shortly.

Renegotiation of the DTAs goes far beyond extending administrative assistance in tax matters. Switzerland not only conducted negotiations on adapting administrative assistance, but also obtained numerous advantages for the economy, according to the Swiss authorities.

These include reductions in withholding tax, zero rates for dividends, interest and royalty payments, and arbitration clauses to avoid double taxation.

In addition, previous discrimination due to administrative assistance policies has now ceased.

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