Switzerland Denmark Double Taxation Treaty

Switzerland-Denmark Double Taxation Treaty

Updated on Tuesday 24th November 2015

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Switzerland-Denmark-Double-Taxation-TreatyDouble tax agreement between Switzerland and Denmark

Switzerland and Denmark have been cooperating for decades, their first double taxation agreement dating back in 1974. In order to maintain this successful cooperation the two countries have amended their double taxation treaty several times during the last years. The last protocol to the Switzerland-Denmark double tax treaty was added in 2010. The agreement covers income and capital gains taxes in Switzerland and Denmark, as well as other similar taxes. Our Swiss lawyers can provide you with detailed information about all the taxes covered by the double taxation treaty with Denmark.

The avoidance of double taxation under the agreement between Switzerland and Denmark

The protocol added to the Switzerland-Denmark double tax treaty refers mainly to reduced tax rates applied to dividend, interest and royalties payments. Under the convention, a reduced tax rate of 15% on the gross amount of dividends paid apply to Danish and Swiss companies. However, dividend payments will be exempt from taxation if the beneficiary holds at least 10% of the voting shares in the company paying the dividends. The protocol also provides for tax exemptions in case of permanent establishments in one of the contracting parties and for pension benefits. Moreover, investment funds constituted under the form of pension schemes will only be taxed in the country where they were established.

Our law firm in Switzerland can explain how the avoidance of double taxation under the treaty with Denmark is done.

New provisions in the Switzerland-Denmark double tax treaty

The new double tax treaty between Switzerland and Denmark also contains a protocol for the exchange of tax information as recommended by the Organization for Economic Co-operation and Development and an arbitration clause. Switzerland has started to introduce arbitration clauses in its double tax treaties in order to offer foreign investors favorable tax rates. Under the arbitration clause in the double tax agreement with Denmark, Switzerland is entitled to claim lower tax rates if Denmark concludes other double taxation treaties providing for lower rates.

For complete information about the provisions of the new double taxation agreement with Denmark, please contact our Swiss attorneys.