Switzerland, Canada Initial DTA
Monday, February 15, 2010
It has recently emerged that Switzerland and Canada have concluded negotiations
on extending administrative assistance in tax matters in accordance with the
Organization for Economic Cooperation and Development’s (OECD) standard
and on other points, and have initialled a Protocol of Amendment on the existing
double taxation agreement (DTA).
According to the Federal Administration, the administrative assistance clause
is in line with the key points agreed by the Federal Council, and the agreement
with Canada is the eighteenth with an administrative assistance clause in accordance
with the OECD standard.
Although the initialled text will at first remain confidential, the Swiss cantons
and business associations concerned will be notified of the content in a brief
report to enable them to submit their comments.
The agreement will be published only after being signed. The Federal Council
will provide authorisation for the agreement to be signed, and the DTA will
subsequently be passed to parliament for approval. Once the partner state has
provided its approval of the agreement, then the agreement can be ratified,
a requirement for its entry into force.
Since the Federal Council decision of March 13, 2009 on extending administrative
assistance in tax matters, Switzerland has initiated corresponding negotiations
with numerous states. Indeed, the Federal Council has already approved the first
ten dispatches on revised DTAs with an administrative assistance clause in accordance
with Article 26 of the OECD Model Convention, and submitted them to parliament
Along with extending administrative assistance in tax matters, Switzerland has
also been able to negotiate various benefits for the economy, including reductions
in withholding tax levied on dividends, interest and royalty payments, as well
as the introduction of an arbitration clause. The avoidance of tax discrimination
has also been achieved. This policy will be pursued and further negotiations
are already envisaged with other countries, the Federal Administration noted.