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Switzerland To Overhaul Domestic Law Governing Double Tax Pacts

Tuesday, November 10, 2020

The Swiss Federal Council has approved proposed legislative changes to alter how the country interprets double tax agreement provisions.

The Federal Council adopted the dispatch on the Federal Act on the Implementation of International Tax Agreements on November 4, 2020. Through the new Act, Switzerland intends to totally revise the Federal Act on the Implementation of International Federal Conventions on the Avoidance of Double Taxation, which dates back to 1951.

The new Act will update the country's domestic law provisions on resolving disputes through the Mutual Agreement Procedure. It will also update the country's domestic law with regards to withholding tax relief provided in international agreements, and improve measures against treaty abuse.

The Swiss Government said the changes respond to changes made to international tax law in recent years and would ensure that tax agreements can continue to be applied easily and with legal certainty in the future.

The Swiss Parliament is due to discuss the bill in early 2021.