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Switzerland and Romania sign revised double taxation agreement Date: 2011-03-03
Switzerland and Romania sign revised double
taxation agreement
On Monday 28th of February, in Bucharest, Switzerland and Romania signed the protocol to amend the double taxation agreement (DTA) in the area of taxes on income and capital. The revision of the DTA will contribute to the further positive development of bilateral economic relations. The revised DTA also contains provisions on the exchange of information in line with the internationally applicable standards.
Aside from the exchange of information, Switzerland and Romania have in particular agreed withholding tax exemption for dividend payments from significant holdings of at least 25% in the capital of the company making the payment, as well as for dividend payments to pension funds. In future, interest payments will be subject to withholding tax of no more than 5%. In addition most-favoured-nation treatment was agreed for Switzerland in an arbitration clause. Should Romania negotiate an arbitration clause with another country, the clause agreed between Switzerland and Romania would automatically become applicable.
The revised DTA with Romania contains the rule on interpretation recommended in mid-February by the Federal Council in the case of administrative assistance. After negotiations finished, a report on the revised agreement was submitted to the cantons and business associations concerned for their comments. They largely approved the signing of the agreement.
The text of the convention can be download through the link established on the website of the Swiss Embassy - http://www.eda.admin.ch/bucarest
On Monday 28th of February, in Bucharest, Switzerland and Romania signed the protocol to amend the double taxation agreement (DTA) in the area of taxes on income and capital. The revision of the DTA will contribute to the further positive development of bilateral economic relations. The revised DTA also contains provisions on the exchange of information in line with the internationally applicable standards.
Aside from the exchange of information, Switzerland and Romania have in particular agreed withholding tax exemption for dividend payments from significant holdings of at least 25% in the capital of the company making the payment, as well as for dividend payments to pension funds. In future, interest payments will be subject to withholding tax of no more than 5%. In addition most-favoured-nation treatment was agreed for Switzerland in an arbitration clause. Should Romania negotiate an arbitration clause with another country, the clause agreed between Switzerland and Romania would automatically become applicable.
The revised DTA with Romania contains the rule on interpretation recommended in mid-February by the Federal Council in the case of administrative assistance. After negotiations finished, a report on the revised agreement was submitted to the cantons and business associations concerned for their comments. They largely approved the signing of the agreement.
The text of the convention can be download through the link established on the website of the Swiss Embassy - http://www.eda.admin.ch/bucarest
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- Revised Double Taxation Agreement (text in English)
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