New Swiss-Dutch DTA Signed
Friday, March 5, 2010
It has recently emerged that Switzerland and the Netherlands have signed a new
double taxation agreement (DTA).
According to the Swiss Federal
Administration, the new agreement replaces the existing DTA of 1951/1966, and contains provisions
on the exchange of information in accordance with the Organization for Economic
Cooperation and Development (OECD) standard.
The Swiss Federal Administration also notes that, compared with the current DTA, improvements
have been achieved in the area of withholding taxes; the percentage holding for
withholding tax exemption for dividends has been reduced from 25% at present to
10%. Dividend payments to pension funds will also be exempt from tax in the source
state in future. Furthermore, a zero rate has been agreed for interest. The new
DTA also contains an arbitration clause, used if the competent authorities are
unable to reach an agreement within three years following the commencement of
a mutual agreement procedure.
Following the negotiations between the two countries, Switzerland submitted a
report on the new DTA to the cantons and the business associations concerned for
Now that the DTA has been signed, the Swiss Federal Council will approve a dispatch
for the attention of parliament, responsible for approving the DTA (as a precondition
for ratification and entry into force). Under the current practice, DTAs that
provide for significant additional obligations are subject to an optional referendum. As was the case up to now, the decision as to whether or not a double taxation
agreement should be subject to an optional referendum rests with parliament.
The agreement can enter into force once the Netherlands has provided its approval.