Double taxation refers to the fact that two countries simultaneously levy taxes on the same article. This situation can occur if companies or individuals are based in different countries or if they receive income from another country. The agreements reduce double taxation and thus help to overcome obstacles to cross-border economic transactions. In addition, they regulate administrative assistance in tax matters. No tax information and impact note has been prepared for the Regulation, as it gives effect to a double taxation convention. Double taxation treaties do not impose obligations on taxpayers, but rather aim to eliminate double taxation and tax evasion. In order for the amendments introduced by the BEPS Convention to take effect, Switzerland must also notify the depositary of the BEPS Agreement that the necessary procedures have been completed. The first such case concerned Luxembourg. In a Memorandum of Understanding of 12 May 2020, the competent authorities of Switzerland and Luxembourg adopted the exact wording of the amendments provided for in the BEPS Agreement (see AS 2020 2641 and AS 2020 2715). This concludes the procedure and Switzerland has made the above-mentioned notification to the depositary of the BEPS Convention. These changes are reflected in the double taxation agreement between Switzerland and Luxembourg.
Switzerland intends to align DTAs not modified by the BEPS Agreement with the BEPS minimum standards through bilateral amendments to the DTAs. 26.08.2020 Federal Council adopts dispatches on the new double taxation agreement with Bahrain and amendments to the DTA with Kuwait The Income Taxes Ordinance (Switzerland) 1978 (S.I. 1978/1408) and was previously amended by the provisions contained in the annexes to the Double Taxation (Income Taxes) (Switzerland) Ordinance 1982 (S.I. 1982/714), 1994 (S.I. 1994/3215) and 2007 (S.I. 2007/3465) and in The Double Taxation Relief and International Tax Enforcement Ordinance 2010 (Switzerland) (S.I. 2010/2689). The agreement was also supplemented by the agreement set out in the annex to the Double Taxation and International Tax Enforcement Ordinance (Switzerland) 2012 (S.I. 2012/3079). The Regulation brings the Protocol of Amendment into force.
3. The competent authorities of the State Party shall endeavour to resolve by mutual agreement any difficulties or doubts arising from the interpretation or application of the Convention. They may also consult jointly to consider measures to combat the misuse of the provisions of the Convention. If the income continues to be taxable in both countries, exemption from double taxation by the taxpayer`s country of residence is granted. There are also provisions to protect nationals and businesses of one country from discriminatory taxation in the other country, as well as the exchange of information and consultation between the tax authorities of the two countries. S.I. 1978/1408; The agreements provided for in this Regulation have been amended by the agreements set out in the Annexes to S.I. 1982/714, 1994/3215, 2007/3465 and 2010/2689 and by the agreements listed in S.I. 2012/3079.
2. The competent authority shall endeavour, if it considers that the objection is justified and incapable of reaching a satisfactory solution, to resolve the matter by mutual agreement with the competent authority of the other Contracting State in order to avoid taxation incompatible with the Convention. Article 2 contains a statement on the effects and content of the rules set out in the Protocol of Amendment (hereinafter referred to as `the Agreements`). The preamble to the Convention and the articles of the Convention concern general definitions, affiliates, dividends, interest, royalties, other income, the elimination of double taxation and the mutual understanding procedure. An article on entitlement to benefits is added to the Convention. 4. The competent authorities of the Contracting States may communicate directly with each other with a view to reaching an agreement within the meaning of the preceding paragraphs. The Convention aims to eliminate double taxation of income and profits generated in one country and paid to residents of the other country. This is done by allocating the taxing rights that each country has under its national law for the same income and profits and/or exempting them from double taxation. There are also specific measures to combat discriminatory tax treatment and support for the enforcement of international tax law.
The Amending Protocol continues this approach. 4. Subject to paragraph 5 of the Convention between the United Kingdom of Great Britain and Northern Ireland and the Swiss Confederation for the avoidance of double taxation in the field of income tax, signed at London in September 1954, as amended by the Protocol signed at London on 14 June 1966 and the Additional Protocol signed at London on 2 August 1974 (hereinafter referred to as `the 1954 Convention`) shall cease to exist on the entry into force of this Convention and shall thereby lose its effect on taxes to which this Convention applies in accordance with paragraph 2 of this Article. Article 26.—1. This Convention shall not affect the fiscal privileges of diplomatic or consular agents under the general rules of international law or the provisions of special conventions. HMRC has reached an agreement with the Swiss tax authorities. The agreement allows for close cooperation between the UK and Switzerland and there is an important exchange of information between the two countries. The agreement provides for a historical levy on Swiss funds held by UK residents up to a maximum of 34% of an account balance as at 31 December 2010 or 31 December 2012. UK residents with Swiss accounts can also be subject to a WHT of up to 48% on their accounts.
With regard to inheritance tax, Swiss paying agents are required to withhold 40% of the tax or make a disclosure in the event of the death of a data subject, as well as other measures. Wishing to conclude an agreement for the avoidance of double taxation in the field of income tax, 30.07.2019 Entry into force of a new double taxation agreement between Switzerland and Zambia The United Kingdom has concluded a number of bilateral agreements on cooperation in tax matters through the exchange of information. The UK has reciprocal agreements with a number of countries regarding the EU Savings Tax Directive. The UK has also concluded a number of non-reciprocal agreements in relation to the EU Savings Tax Directive. 2. Where a Contracting State relates to and taxes the profits of an enterprise of that State, the profits on which an enterprise of the other Contracting State has been taxed in that other State and the items so included shall include income, deductions, revenues or expenses which would have been charged to the enterprise of the first-mentioned State if the conditions between the two enterprises had been: which would have been between independent undertakings, the competent authorities of the Contracting States may consult each other jointly with a view to reaching an agreement on the offsetting of profits or losses in both Contracting States. Texts of agreements: Secret collection of federal laws The United Kingdom has one of the largest networks of tax treaties with more than 100 countries. These agreements aim to eliminate double taxation of income or profits generated in one territory and paid to residents of another territory. They work by dividing the tax rights that each country claims through its national laws on equal income and profits. Most contracts are based on the Organisation for Economic Co-operation and Development (OECD) model tax agreement. 25.11.2019 Switzerland and Bahrain sign double taxation agreement The tax tax treaty between Switzerland and the United Kingdom was terminated on 1 January 2017, as the agreement between Switzerland and the EU on the automatic exchange of information in tax matters entered into force on that date.
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