Switzerland has concluded double taxation treaties with more than one hundred states, including China, Hong Kong, Singapore, the Gulf states and a number of African countries. The articles collected here explain how residence and permanent establishments are determined under these treaties, how the Swiss withholding tax on dividends is reduced and refunded, which states have a treaty with Switzerland and which do not, and how the treaties interact with the investment protection agreements. They help groups and investors choose where to place a holding company and how to route payments between their companies.
Switzerland has concluded double taxation treaties with more than one hundred states, including China, Hong Kong, Singapore, the Gulf states and several African countries. The treaties decide how much tax is withheld on dividends, interest and royalties and where a company is taxed, which makes them central to any cross-border structure.
For a foreign group, the practical effect of a treaty can be considerable. Switzerland levies a withholding tax of 35 per cent on dividends, and a treaty can reduce this rate substantially, under some treaties to zero for qualifying participations, provided the recipient is entitled to the benefits and the refund or relief procedure is followed correctly and on time.
Treaty benefits are not granted automatically. The Swiss Federal Tax Administration examines whether the person claiming relief is the beneficial owner of the income and whether the structure has genuine substance, and many modern treaties contain a principal purpose test directed against arrangements that serve mainly to obtain treaty benefits.
A holding or trading company in Switzerland therefore needs real management, qualified directors or staff in the country, and decisions that are actually taken there. Families and groups that plan their structure with these requirements in mind can use the treaty network with confidence and avoid disputes with the tax authorities of Switzerland and of the source states.
The articles explain the treaties with China and Hong Kong, the treaty network with African states and its gaps, and how tax treaties and investment protection agreements work together when a holding company is placed in Switzerland.
Switzerland's tax and investment treaties with African states
A Swiss company in an African project receives dividends, interest, licence fees and service fees from the host state and… Read more Tax Treaties · OverviewDouble taxation treaties: Switzerland, China and Hong Kong
Switzerland has a dense network of double taxation treaties. For companies from China and Hong Kong, the treaties decide how… Read more