The Federal Department of Finance announced in Bern today that Switzerland and Norway have signed a Protocol to amend their Double Taxation Agreement (DTA) in the area of taxes on income and on capital. The agreement was signed in Oslo.
The new additional agreement also contains a provision on the exchange of information in accordance with the OECD standard which was negotiated in line with parameters decided by the Federal Council.
Following the Federal Council decision on 13 March 2009, Norway is the fourth country with which Switzerland has signed a DTA containing the extended administrative assistance clause in accordance with Art. 26 of the OECD Model Convention. The others are with Denmark, Luxembourg and France.
Switzerland negotiated DTAs with an extended administrative assistance clause in accordance with Art. 26 of the OECD Model Convention with fourteen countries. Along with the agreements already signed with Denmark, Luxembourg, France and Norway, there are agreements with Mexico, the USA, Japan, the Netherlands, Poland, the UK, Austria, Finland, Qatar and Singapore. These DTAs have been initialled but not yet signed. The Department advises that the Federal Council has given the go-ahead for DTAs to be signed with Mexico, the United Kingdom and Austria; the other initialled DTAs will be submitted to the Federal Council shortly for approval to be signed.
A media release from the Federal Department of Finance states that the negotiations with Norway also covered other amendments. In the future, only the country of residence will have the right to tax dividends if the holding in the capital is at least 10 per cent. Up to now the so-called zero rate was applicable (i.e. the source state did not have the right to levy taxes on dividends), only on investment amounts of 20 per cent and upwards. The right of the source state to tax pensions, restricted to 15 per cent, was introduced. In addition a most-favoured nation clause was included in the Protocol of Amendment in the event of Norway agreeing upon an arbitration clause in a DTA with another country.
The Conference of Cantonal Finance Directors and the business associations welcome the signing of the revised agreement.