Switzerland has started to update or enforce its double tax treaties in order to provide advantageous condition for foreign investors. During November 2015 alone, Switzerland has enforced four new double taxation agreements: with Cyprus, Estonia, Iceland and Uzbekistan. All four conventions contain clauses for administrative assistance and for the promotion of bilateral trade relations.

Switzerland signs its first double tax agreement with Cyprus

Among all four countries Switzerland has enforced double tax treaties with, the one with Cyprus was the most recently signed. Switzerland and Cyprus have concluded their first agreement on the avoidance of double taxation in the summer of 2014. The most important aspects of this agreement are the exemption from taxation of interest and royalties payments, while dividends benefit from reduced rates ranging from 0% to 15%. Our Swiss lawyers can provide you with information about all applicable rates under the tax agreement with Cyprus.

Like other double tax treaties Switzerland has enforced, the agreement with Cyprus also provides for the taxation of offshore companies. Swiss companies considered offshore companies in Cyprus will be deemed as permanent establishments if they carry out activities in Cyprus for at least 30 days within a calendar year and will be taxed as such. Another novelty in the Switzerland-Cyprus double taxation treaty is that it does not provide for the taxation of activities derived from maritime and air transportation in the case of offshore companies.

Swiss agreements with Estonia, Iceland and Uzbekistan have been renewed

In its wish to adhere to the latest international standards imposed by the OECD (Organization for Economic Co-operation and Development), Switzerland has renewed its double tax agreements with Estonia, Iceland and Uzbekistan. The conventions with Estonia and Uzbekistan date back in 2002 were added each a new amendment referring to the maximum tax rate of 10% on dividend payments. The agreement with Uzbekistan was amended with a new protocol on administrative assistance.

The last updated agreement with Iceland was renewed for the first time since 1989 when it was signed. The convention contains a protocol referring to a maximum tax rate of 5% on royalties and an arbitration clause.

Switzerland has now a 53 double tax treaties list, of which 46 are also enforced. If you need information about any if the country’s double taxation agreements do not hesitate to contact our Swiss law firm.