Double taxation agreements (DTAs) prevent the double taxation of private individuals and legal entities with an international nexus in the area of taxes on income and capital. They are therefore 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.
(in German, link to the Federal Tax Administration FTA)
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 and includes:
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 2021, the DTAs with Brazil, Saudi Arabia and Bahrain and the protocols amending the DTAs with Malta, Cyprus, Liechtenstein and Japan have entered into force. Furthermore, the DTA with Ethiopia and the protocols amending the DTAs with North Macedonia, Armenia, Tajikistan and the United Arab Emirates were signed.
BEPS Convention enters into force
Last modification 21.03.2023