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Switzerland Germany Double Taxation Treaty

Switzerland-Germany Double Taxation Treaty

Updated on Monday 21st September 2015

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Switzerland-Germany-Double-Taxation-TreatySwiss double taxation treaties

Switzerland has signed double taxation agreements with over 80 countries and approximately half of them are modernized according to the Organization for Economic Co-operation and Development (OECD) model. The common provision of all double tax treaties Switzerland has concluded is that non-residents may apply for a partial or total tax refund with the Swiss cantonal tax authorities. Another advantage for foreign investors from countries that have not signed any tax agreement with Switzerland is that they can ask for tax deductions in their home countries, deductions that can be obtained as tax credits in Switzerland.

For other information about the advantages of doing business you may contact our lawyers in Switzerland.

Double taxation agreement between Switzerland and Germany

At the end of 2011 Switzerland and Germany have revised and updated their double taxation agreement. Among the most important provisions of the double tax agreement is the new threshold for the free of tax distribution of dividends that was lowered from 20% to 10%, meaning a recipient must own at least 10% of the voting power within the German or Swiss company distributing the dividends in order to benefit from the tax exemption. However, the recipient must own the 10% participation for an uninterrupted period of 12 months. Also, if the holding period does not satisfy the 12 months period, a 15% withholding tax on dividends will be levied with the possibility of reclaim after the required period of time has elapsed.

Considering the changes brought to the Swiss dividend declaration requirements that have changed, it is advisable to verify the new reclaim procedures with a law firm.

The new Germany-Switzerland double taxation agreement also provisions that dividends from German real estate companies, investment funds and investment companies will be taxed with a 15% withholding tax.

Exchange of information between Switzerland and Germany

The new double tax treaty between Germany and Switzerland also contains provisions about the exchange of tax information as required by the OECD. The double taxation agreement states that the exchange of information must take place for all the taxes covered by the treaty. However, the information may be communicated only at the request of the tax authorities in Switzerland or Germany.

For complete information about the double tax agreement with Germany, please refer to our attorneys in Switzerland.

 

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