Switzerland and Ukraine sign protocol of amendment to double taxation agreement
Bern, 24.01.2019 - On 24 January 2019 in Davos, Switzerland and Ukraine signed a protocol of amendment to the agreement for the avoidance of double taxation with respect to taxes on income and capital (DTA). The protocol implements the minimum standards for double taxation agreements and also adapts the DTA to the current treaty policy of the two states.
Concerning the taxation of dividends, a stake of 10% in the distributing company, instead of the current 20%, will be regarded as a qualified participation in the future. Moreover, dividends paid to the National Bank or to the contracting states will be taxable only in the beneficial owner's state of domicile. Finally, a residual tax rate of 5% is planned for both interest and royalty payments.
The protocol of amendment contains an abuse clause which refers to the main purpose of an arrangement or transaction and thus ensures that the DTA is not abused. In order to increase legal certainty for taxpayers, an arbitration clause has also been added to the agreement. Finally, the agreement contains an administrative assistance clause in accordance with the international standard for the exchange of information upon request.
The cantons and the business circles concerned have welcomed the conclusion of the protocol of amendment. It still has to be approved by parliament in both countries before it can come into force.
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- Protocol to amend the agreement between Switzerland and Ukraine for the avoidance of double taxation with respect to taxes on income and capital (PDF, 220 kB)
Federal Department of Finance