Switzerland Double Tax Treaties
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To prevent or alleviate the effects of double taxation in Switzerland and abroad, Switzerland has executed over 60 double taxation conventions, which largely follow the OECD specimen treaty. Switzerland uses the tax exemption method and does not tax income or net worth that is allocated to the source country.
Effects:
Taxpayers who are professionally active in both countries of a double taxation convention often wonder about the potential benefits of such treaties.
Conventions:
For individuals, double taxation treaties relate to income tax and the net worth tax. Double taxation treaties largely follow the OECD specimen treaty, which defines where the income or the assets are to be taxed and also describes the method for avoiding double taxation. The income and net worth is included only for determining the tax rate (progression).
On certain investment income (dividends, interest and license fees) the right of taxation belongs, on the one hand to the state in which the income arises, and on the other to the state of the recipient’s residence. In the source state, the tax is limited by the conventions, which can lead to a relief of 20% to 35%.
The remaining tax in the source country can normally be deducted from the Swiss tax liability (offset method). This offset method applies in Switzerland only on an exception basis whereas in foreign countries it is standard. The offset method always has the effect that taxes are pushed up to the higher level (in the source country or the country of residence).
List of Double Tax Treaties:
| Country | Year | Maximum Source Country Tax Rates (% of gross payment) (for split rates, please consult the relevant article in the treaty) |
||
| Dividends (a) | Interest | Royalties | ||
| AUSTRALIA | 1984 | 15 | 10 | 10 |
| AUSTRIA | 1964 | 10 | 0 | 0/10 |
| BELGIUM | 1973 | 15 | 15 | 0 |
| BULGARIA | 2002 | 5/10 | 0/5 | 10 |
| CANADA | 1967 | 0/15 | 15 | 0 |
| CANADA (New) | Not in force | 5/15 | 0/10 | 0/10 |
| CHINA | 2001 | 5/10 | 0/10 | 6/10 |
| CROATIA | 2004 | 5/10 | 0 | 10 |
| CYPRUS | 1952 | 0 | 0 | 0/5 |
| CZECH REP. | 1997 | 5/15 | 0 | 10 |
| DENMARK | 1994 | 0/15 | 0 | 0 |
| ESTONIA | 1999 | 5/15 | 0/10 | 5/10 |
| FINLAND | 1990 | 0/15 | 0 | 0 |
| FRANCE | 1966 | 10/15 | 0 | 0 |
| GERMANY | 1959 | 15 | 0 | 0 |
| GREECE | 2005 | 5/15 | 5 | 5 |
| HUNGARY | 1997 | 5/15 | 0 | 0 |
| ICELAND | 2005 | 5/15 | 0 | 0/10 |
| INDIA | 2002 | 10 | 0/10 | 10 |
| ISRAEL | 1996 | 10 | 5/10 | 10 |
| ITALY | 1967 | 15 | 10 | 0 |
| JAPAN | 1974 | 10/15 | 10 | 10 |
| KOREA (REP.) | 1992 | 10/15 | 0 | 0 |
| LATVIA | 1999 | 5/15 | 0/10 | 5/10 |
| LITHUANIA | 1999 | 5/15 | 0/10 | 5/10 |
| LUXEMBOURG | 1968 | 5/15 | 0 | 0 |
| MALAYSIA | 2000 | 10 | 0/10 | 8 |
| MEXICO | 1999 | 5/10 | 0/5/10 | 10 |
| NETHERLANDS | 1965 | 1965 | 0/15 | 0 |
| NEW ZEALAND | 1989 | 15 | 10 | 10 |
| NORWAY | 2002 | 0/5/15 | 0 | 0 |
| PAKISTAN | 1968 | 10/no limit | no limit | 0 |
| POLAND | 1996 | 0/15 | 0/10 | 10 |
| PORTUGAL | 1995 | 15 | 0/15 | 10 |
| ROMANIA | 2001 | 3 | 0/3 | 0/3 |
| RUSSIA | 1996 | 10 | 0 | 0 |
| SLOVAK REP. | 2000 | 0/10 | 0 | 0/10 |
| SLOVENIA | 2003 | 5/15 | 0/5 | 5 |
| SOUTH AFRICA | 1998 | 0 | 0 | 0 |
| SPAIN | 1995 | 0/15 | 0 | 5/8/10 |
| SWEDEN | 1998 | 5/15 | 0 | 0 |
| SWITZERLAND | 1965 | 10/15 | 0 | 0 |
| UK | 1976 | 5/15 | 0 | 0 |
| UNITED STATES | 1998 | 5/15 | 0 | 0 |
| ZAMBIA | 1967 | 0 | 0 | 0 |
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