Double Taxation Agreement Switzerland Hong Kong

On 13 March 2009, the Federal Council announced that Switzerland intends to adopt OECD standards for mutual tax assistance, in accordance with Article 26 of the OECD Model Tax Convention. The decision allows the exchange of information with other countries in individual cases where a concrete and reasoned request has been made. The Federal Council has decided to withdraw the reserve for the OECD`s model tax treaty and to begin negotiations on the revision of double taxation conventions. However, Swiss banking secrecy remains intact. Russia`s double taxation agreements with Hong Kong and Switzerland are on the radar for the Russian authorities who want to ensure that the country can be subject to at least 15% of dividends at source and interest payments. Bern, 06.12.2010 – Switzerland and Hong Kong today signed a double taxation agreement (DBA) in the area of income tax in Hong Kong. The DBA contains provisions on the exchange of information, which are in line with OECD standards and have been negotiated within the parameters adopted by the Federal Council. The DBA will contribute to the positive development of bilateral economic relations. For all other income and assets, Switzerland applies the “progression exemption” method for contracting states in order to avoid double taxation.

As a result, Switzerland will not grant credits for foreign taxes. The only exception is the contractual rate of foreign source interest, royalties and dividends. In October 2010, an agreement was signed to begin negotiations for an agreement to tax unreported British accounts in Switzerland and other information regarding tax and banking information shared between the two states. The agreement will strengthen, among other things, cross-border tax cooperation and improve banks` access to the market. Negotiations began in early 2011 and the agreement was signed on 6 October 2011. On March 20, 2012, a protocol was signed to clarify outstanding issues. Switzerland currently has a network of social security agreements with more than 30 countries. Switzerland has also concluded a bilateral agreement with the European Union that covers all 27 EU countries and more or less adapts the rules in force in the European Union.

There is a similar agreement with the EFTA countries. Whether or not a social security contract is applicable is often related to the nationality of the individual. If necessary, affected workers can normally remain (for a limited time) in the social security system of the country of origin and are exempt from the host country`s scheme. The protocol also provides that the herendation will be included in the agreement. Recipients of an undisclosed Swiss bank account must either pay inheritance tax or give their consent to the dive permit to be disclosed to the British authorities. This agreement largely follows the OECD`s model of agreement and Swiss policy in this regard. Some of the countries that have double taxation agreements with Switzerland: steps between signing and entering into force After the signing of a Double Taxation Convention (DBA), the Federal Council presents the agreement signed with a message to Parliament. Parliament is responsible for the approval of the DBA and decides whether a specific DBA should be submitted to an optional referendum.