The treaty framework: the convention of 1971 and its protocols

The convention and its revisions

The central instrument of the tax relationship is the Agreement between the Swiss Confederation and the Federal Republic of Germany for the avoidance of double taxation with respect to taxes on income and on capital of 11 August 1971, published in the Swiss classified compilation under SR 0.672.913.62. It has been revised by protocols of 17 October 1989, 21 December 1992, 12 March 2002, 27 October 2010 and 21 August 2023. The last of these entered into force on 27 November 2025.¹ The convention is accompanied by an exchange of letters, notes, negotiation protocols and mutual agreements, which the treaty practice of both states treats as authoritative aids to its interpretation. For the practitioner the consequence is that the text of the convention alone rarely answers a question. The protocols and the mutual agreements concluded between the competent authorities must always be consulted as well.

The convention of 1971 was negotiated at a time when the German treaty negotiators already regarded Switzerland as a destination for German capital and taxpayers seeking to escape German tax. This concern explains its most distinctive feature, the set of rules in Article 4 that allow Germany to continue taxing certain persons who have become resident in Switzerland. No other German double taxation convention contains provisions of comparable reach. The convention thus documents the historical tension between the two states that the preceding chapter has traced, a tension it continues to reflect today.

The Protocol of 2023

The Protocol of 21 August 2023 modernised the convention without changing the fundamental allocation of taxing rights. The State Secretariat for International Finance announced its entry into force on 28 November 2025 and stated that it applies in principle from 1 January 2026. According to the announcement, the protocol clarifies the treatment of cross-border self-employed activities and introduces new procedures for the resolution of disputes. It also adopts the OECD standards for the attribution of profits to permanent establishments and implements the minimum standards of the BEPS project, including an anti-abuse clause based on the principal purpose of an arrangement or transaction.² The protocol further replaces the term “recipient” in the articles on dividends, interest and royalties with the concept of the beneficial owner. It adds a mandatory arbitration procedure to the mutual agreement procedure in Article 26 and inserts in Article 24 a clarification that the domestic minimum tax rules adopted under the second pillar of the OECD project remain applicable.³

For German families in Zurich the most tangible changes concern employment income. Commentators have pointed out that the protocol incorporates into the treaty several mutual agreements that the competent authorities had previously concluded on the rules for cross-border commuters. In their reading it also introduces rules on the allocation of salaries on the basis of actual working days and clarifies the treatment of remuneration in the public service.⁴ The Federal Tax Administration maintains a country page that collects the convention, the protocols and the mutual agreements, including those on home office work by cross-border commuters and on relief from German withholding taxes.⁵

Notes

1. Fedlex, SR 0.672.913.62, Abkommen vom 11. August 1971 zwischen der Schweizerischen Eidgenossenschaft und der Bundesrepublik Deutschland zur Vermeidung der Doppelbesteuerung auf dem Gebiete der Steuern vom Einkommen und vom Vermögen, consolidated version of 27 November 2025, https://www.fedlex.admin.ch/filestore/fedlex.data.admin.ch/eli/cc/1972/3075_3128_2910/20251127/de/pdf-a/fedlex-data-admin-ch-eli-cc-1972-3075_3128_2910-20251127-de-pdf-a.pdf. The footnotes to the title list the amending protocols with their dates of entry into force: 30 November 1990 (Protocol of 1989), 29 December 1993 (Protocol of 1992), 24 March 2003 (Protocol of 2002), 21 December 2011 (Protocol of 2010) and 27 November 2025 (Protocol of 2023, AS 2025 791). ↩
2. Staatssekretariat für internationale Finanzfragen (SIF), “Inkrafttreten des Änderungsprotokolls zum Doppelbesteuerungsabkommen mit Deutschland”, 28 November 2025, https://www.sif.admin.ch/de/inkrafttreten-des-aenderungsprotokolls-zum-doppelbesteuerungsabkommen-mit-deutschland. The SIF emphasises that the protocol leaves the existing allocation of taxing rights between the two states unchanged. ↩
3. Fedlex, SR 0.672.913.62, consolidated version of 27 November 2025, cited above, Articles 10 to 12, 24 and 26 in the version of the Protocol of 21 August 2023. ↩
4. LawMedia Redaktion, “DBA Deutschland – Schweiz: Änderungen aufgrund des Revisionsprotokolls vom 21.08.2023”, LAWNEWS, 6 June 2024, https://law.ch/lawnews/2024/06/dba-deutschland-schweiz-aenderungen-aufgrund-des-revisionsprotokolls-vom-21-08-2023/, which also reports that the protocol confirms the holding period of 365 days for the exemption of intra-group dividends and that the holding period is not interrupted by mergers, divisions or changes of legal form. ↩
5. Eidgenössische Steuerverwaltung (ESTV), “Deutschland”, https://www.estv.admin.ch/de/deutschland, listing among other documents the mutual agreement of 19 December 2022 on the relief procedure for German withholding taxes, the mutual agreement of 6 April 2023 on Article 15 paragraph 4, and the agreements on cross-border commuters working from home. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of September 2025.