Double taxation agreements (DTAs) prevent the double taxation of natural persons and legal entities with an international nexus in the area of taxes on income and capital. They therefore represent an important element in promoting international economic activities. Switzerland currently has DTAs with over 100 countries and is seeking to extend its agreement network further. Switzerland also has eight agreements for the avoidance of double taxation with respect to inheritance and estate taxes.
Double taxation typically occurs when two states tax the same income or assets of a taxpayer. Most of the provisions of a DTA are dedicated to avoiding double taxation by giving the contracting states the right to tax the individual types of income and assets. However, they merely restrict the contracting states' taxation right. The basis for taxation lies in the contracting states' domestic law.
The list of persons who can benefit from a DTA is long and varied, e.g.:
- Persons who simultaneously have a permanent residence in two states
- Export companies and groups with foreign subsidiaries that are protected from double taxation by a DTA
- Employed persons with temporary work assignments abroad
DTAs additionally have an important function for investments of all kinds abroad, as they avoid double taxation on profits and revenue from foreign investments. Moreover, a DTA generally contains certain bans on discrimination, a dispute resolution mechanism and a clause on the exchange of information upon request.
Since the beginning of 2018, the DTAs with Kosovo and Pakistan and the protocols amending the DTAs with Ghana and Latvia have entered into force. In addition, new DTAs have been signed with Saudi Arabia and Brazil, as has the revision of the existing DTA with Ukraine.
Last modification 08.04.2019