Federal Council adopts dispatch on double taxation agreement with Oman

Bern, 14.10.2015 - Yesterday, the Federal Council adopted the dispatch on the new double taxation agreement (DTA) with Oman and submitted it to Parliament for approval. The agreement will promote bilateral economic relations and contains provisions on the exchange of information upon request in accordance with the OECD standard.

Aside from the exchange of information, Switzerland and Oman have in particular agreed that dividends can be taxed at a maximum rate of 15% in the source state. Dividend payments from significant holdings can be subject to a maximum of 5% tax in the source state, and dividend payments to pension funds and the contracting states are taxable solely in the recipient's state of domicile. Interest may be taxed at no more than 5% in the source state. Moreover, provision has been made for taxation solely in the recipient's state of domicile for certain interest payments. The source state can tax royalty payments at a rate of no more than 8%, whereby lower maximum tax rates for royalty payments agreed by Oman with third countries will apply also for Switzerland by virtue of a most favoured nation clause. Pensions may also be taxed at source. Furthermore, it has been stipulated that contributions to pension funds in the other country are deductible.

The new double taxation agreement was signed on 22 May 2015. Following parliamentary approval in both countries, it will probably enter into force in 2016. To date, Switzerland has signed 53 DTAs and nine tax information exchange agreements (TIEAs) that are in line with the international exchange of information standard, and of these, 41 DTAs and seven TIEAs are in force.

Switzerland and Oman sign new double taxation agreement

Bern, 22.05.2015 - Switzerland and Oman signed a new double taxation agreement (DTA) in the area of taxes on income today within the framework of the political consultations in Sugiez (canton of Fribourg). The new DTA contains provisions on the exchange of information in accordance with the international standard applicable at present and largely follows Switzerland's agreement policy. It will contribute to the further positive development of bilateral economic relations.

Aside from the exchange of information, Switzerland and Oman have in particular agreed that dividends can be taxed at a maximum rate of 15% at source. Dividend payments from significant holdings can be subject to a maximum of 5% tax in the source state, and dividend payments to pension funds and the contracting states are taxable solely in the recipient's state of domicile. Interest will be taxed at no more than 5% in the source state. Moreover, provision has been made for taxation solely in the recipient's state of domicile for certain interest payments. Royalty payments are subject to tax of no more than 8% in the source state, whereby lower maximum tax rates for royalty payments agreed by Oman with third countries will apply also for Switzerland by virtue of a most favoured nation clause. Pensions may also be taxed at source. Furthermore, it has been stipulated that contributions to pension funds in the other country are deductible.

After negotiations finished, a report on the new DTA with Oman was submitted to the cantons and the business associations concerned for their comments. They approved the signing. The new agreement still has to be approved by Parliament in both countries before it can come into force.

To date, Switzerland has signed 51 DTAs and eight tax information exchange agreements (TIEAs) that are in line with the international exchange of information standard, and of these, 41 DTAs and three TIEAs are in force.