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Switzerland, Japan DTA Revisions Soon In Force

by Ulrika Lomas, Tax-News.com, Brussels

30 December 2011


The Swiss Federal Department of Finance (FDF) has recently announced that the revised bilateral double taxation agreement (DTA) between Switzerland and Japan, signed on May 21, 2010, will enter into force on December 30, 2011.

According to the FDF, the agreement contains an OECD administrative assistance clause, and will contribute to the further positive development of bilateral economic relations.

Commenting on the revision, the FDF states that: “Compared with the current DTA, improvements have been achieved in the area of withholding taxes: payments of dividends between companies linked by holdings of at least 50% of the voting rights will benefit from the zero rate in future. If the stake is more than 10% of the voting rights, there will remain a residual tax of 5%.”

It adds: “In future, a general zero rate will be applicable to royalty payments. Finally, interest payments to financial institutions (banks, insurance or reinsurance companies and securities dealers) or pension funds will also be exempt from withholding tax in future.”

Switzerland and Japan concluded the diplomatic exchange of notes on ratification of the DTA on November 30, 2011, and the provisions of the agreement will apply from January 1, 2012.

TAGS: tax | investment | double tax agreement (DTA) | interest | insurance | Organisation for Economic Co-operation and Development (OECD) | agreements | withholding tax | Switzerland | dividends | Japan

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