Switzerland and the United Arab Emirates have recently signed in Dubai a double taxation agreement (DTA) in the area of taxes on income, containing provisions on the exchange of information in line with the internationally applicable standards.
According to the Swiss federal administration, the DTA will contribute to the positive development of bilateral economic relations between the two countries.
Commenting on the signing, the administration states that: “Aside from a provision on the exchange of information, Switzerland and the United Arab Emirates have agreed withholding tax exemption for dividend payments to the other contracting state or state institutions (eg sovereign funds), as well as for dividend payments to pension funds.”
It notes: “There will be a residual tax of 5% for dividend payments to companies that hold a stake of at least 10% in the company making the payment, and of 15% in all other cases. Interest and royalty payments will be taxed only in the state of residence.”
It adds: “The DTA with the United Arab Emirates contains the rule on interpretation in the case of administrative assistance recommended in mid-February 2011 by the Federal Council.”
Following negotiations, a report on the DTA was submitted to the Swiss cantons and the business associations concerned for their comments, the administration concludes, noting that they largely approved the signing of this agreement.
According to the Swiss federal administration, the DTA will contribute to the positive development of bilateral economic relations between the two countries.
Commenting on the signing, the administration states that: “Aside from a provision on the exchange of information, Switzerland and the United Arab Emirates have agreed withholding tax exemption for dividend payments to the other contracting state or state institutions (eg sovereign funds), as well as for dividend payments to pension funds.”
It notes: “There will be a residual tax of 5% for dividend payments to companies that hold a stake of at least 10% in the company making the payment, and of 15% in all other cases. Interest and royalty payments will be taxed only in the state of residence.”
It adds: “The DTA with the United Arab Emirates contains the rule on interpretation in the case of administrative assistance recommended in mid-February 2011 by the Federal Council.”
Following negotiations, a report on the DTA was submitted to the Swiss cantons and the business associations concerned for their comments, the administration concludes, noting that they largely approved the signing of this agreement.
