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Switzerland, Czech Republic Sign Revised DTA

by Ulrika Lomas, Tax-News.com, Brussels

13 September 2012


Switzerland and the Czech Republic have recently signed in Prague a protocol to amend the double taxation agreement (DTA) between the two countries in the area of taxes on income and capital.

According to the Swiss Federal Department of Finance (FDF), the protocol contains provisions on the exchange of information in accordance with the international standard applicable at present and some adjustments to the existing agreement.

The FDF states that: “Aside from an OECD administrative assistance clause, Switzerland and the Czech Republic have agreed that both countries may levy withholding tax of no more than 15% on gross dividend amounts.”

“If, however, a company holds a stake of at least 10% in the capital of the distributing company for at least a year, the dividends will be exempt from withholding tax. Moreover, there will be no withholding taxes on dividends paid to the national banks of the two countries or to pension funds.”

After negotiations finished, a report on the protocol to the DTA with the Czech Republic was submitted to the Swiss cantons and the business associations concerned for their comments. They approved the signing.

The revision still has to be approved by parliament in both countries before it can come into force.

TAGS: Finance | tax | business | double tax agreement (DTA) | agreements | withholding tax | Czech Republic | Switzerland | dividends

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