Amendments to the double taxation agreement with Luxembourg in force

Bern, 26.11.2010 - The additional agreement amending the double taxation agreement (DTA) between Switzerland and Luxembourg has entered into force. Aside from a provision on the exchange of information in accordance with the OECD standard, the inclusion of an arbitration clause was also agreed with Luxembourg. Moreover, the minimum stake for withholding tax exemption for dividend payments made to parent companies was reduced from 25% to 10%. Withholding tax exemption will also be extended to dividends paid to pension funds or occupational benefits schemes.

Switzerland and Luxembourg informed one another via diplomatic channels that all of the conditions and legal procedures for this additional agreement's entry into force had been met. The agreement entered into force on 19 November 2010 upon receipt of the second note. The application of a DTA's new provisions is always based on the arrangements stipulated in the agreement. As a rule, the new provisions are applicable from 1 January of the calendar year following the date of entry into force. The provisions of the additional agreement with Luxembourg will apply to the taxes withheld at source on income credited or paid out to non-residents on or after 1 January 2011.

Regarding other taxes on income or assets, the provisions will apply for the 2011 calendar year (including the corresponding 2011 financial year). The provisions on the exchange of information will have effect for tax years that commence on or after 1 January 2011.

The additional agreement with Luxembourg amending the DTA with respect to taxes on income and capital was signed in Bern on 25 August 2009, and was approved by parliament on 18 June 2010. The referendum deadline expired unused on 7 October 2010.

Address for enquiries

Alexandra Storckmeijer, Division for International Affairs, Federal Tax Administration, tel. 031 322 85 74