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Switzerland Adopts Proposals On Multiple Tax Accords

by Ulrika Lomas, Tax-News.com, Brussels

25 November 2013


The Swiss Federal Council has adopted proposals on multiple double taxation agreements (DTAs), together with a proposal on the first tax information exchange agreements (TIEAs).

The DTAs are with with Australia, Hungary, and China, replacing the currently valid agreements, and containing administrative assistance provisions in accordance with the internationally applicable standard. Furthermore, the treaties aim to promote the development of bilateral economic relations.

The revised agreement with Australia was signed on July 30, 2013, with Hungary on September 12, 2013, and with China on September 25, 2013.

Aside from an OECD administrative assistance clause, the three accords provide for reductions in withholding tax, and sometimes even tax exemption, in the case of dividends, interest and royalty payments in the source state. The agreements thereby facilitate the activities of the export economy, promote bilateral investments, and contribute to the prosperity of Switzerland and that of the partner states.

The first tax information exchange agreements are with the Isle of Man, Guernsey, and Jersey.

Like DTAs, TIEAs are instruments for concluding an administrative assistance clause in accordance with the international standard. Unlike DTAs, which are aimed primarily at avoiding double taxation and therefore contain other material provisions, TIEAs merely govern the exchange of information upon request.

The bilateral TIEA with the Isle of Man was signed on August 28, 2013, with Guernsey on September 11, 2013, and with Jersey on September 16, 2013.

The agreements will now be submitted to parliament for approval, before they can enter into force. Further, they are subject to an optional referendum. The Swiss cantons and business associations concerned have welcomed the conclusion of the treaties.

Tax information exchange agreements with other jurisdictions are currently being negotiated.

TAGS: Isle of Man | compliance | tax | investment | business | tax information exchange agreement (TIEA) | double tax agreement (DTA) | tax compliance | Hungary | tax avoidance | interest | Organisation for Economic Co-operation and Development (OECD) | Australia | China | Guernsey | Jersey | agreements | tax rates | withholding tax | Switzerland | tax breaks | dividends | individual income tax | Tax | Tax Evasion

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