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Switzerland, Peru Sign DTA

by Ulrika Lomas, Tax-News.com, Brussels

27 September 2012


Switzerland and Peru have recently signed in Lima a double taxation agreement (DTA) in the area of taxes on income and capital.

According to the Swiss Federal Department of Finance (FDF), the accord contains provisions on the exchange of information in accordance with the international standard applicable at present and increases legal certainty for Swiss investors. The DTA will also serve to contribute to the further positive development of bilateral economic relations, the FDF adds.

Switzerland and Peru 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, this tax will be reduced to 10%.

Withholding tax on interest may amount to 15% at most; on bank loans 10% at most. A residual tax of no more than 15% can be levied on royalty payments. A most-favoured nation clause has been agreed if Peru provides lower residual tax rates to another country.

Following the negotiations, a report on the DTA with Peru was submitted to the Swiss cantons and business associations concerned for their comments. They largely approved the signing of the agreement.

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

TAGS: tax | business | double tax agreement (DTA) | interest | royalties | agreements | tax rates | withholding tax | Peru | Switzerland

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