Following the Federal Council decision on 13 March 2009, Denmark is the first country with which Switzerland has signed a DTA containing the extended administrative assistance clause in accordance with Art. 26 of the OECD Model Convention. In order to be removed from the "grey list" drawn up by the OECD Secretariat for the G20, twelve agreements based on the OECD standard have to be signed.

Up to now Switzerland has negotiated DTAs with an extended administrative assistance clause in accordance with Art. 26 of the OECD Model Convention with thirteen countries. Already initialled but not yet signed are DTAs with the extended administrative assistance clause with Luxembourg, Norway, France, Mexico, the USA, Japan, the Netherlands, Poland, the United Kingdom, Austria, Finland and Qatar as well. The Federal Council has given the go-ahead for DTAs to be signed with Denmark, Luxembourg, Norway, France, Mexico and the United Kingdom. The other initialled DTAs will be submitted to the Federal Council shortly for approval to be signed.

Along with extending administrative assistance, the negotiations with Denmark were also used to carry out other amendments in the DTA. In the current DTA, only the country of residence has the right to tax dividends. The source state does not have the right to levy taxes on dividends (so-called zero rate). In the renegotiated DTA the zero rate is only applicable to dividends on a holding of more than 10 per cent of the capital and for dividends paid out to pension schemes of the Pillar 1, 2 and 3a. For all other dividends, the respective source state has a right to tax up to a maximum of 15 per cent. Furthermore, the rules on pensions from private pension schemes were revised. Whereas pensions such as these, in accordance with the current DTA, were taxed only in the country of residence, now the primary right to tax lies with the source state. Explicit provisions are also made for tax deductibility of contributions to pension schemes in the other Contracting State (in Switzerland Pillar 1, 2 and 3a). In addition, there is now an arbitration clause in the revised DTA.

Both the cantons and the business associations concerned welcome the conclusion of this Protocol of Amendment with Denmark. In November the FDF will submit the dispatch to parliament and in doing so will also submit the question of the optional referendum.

Stages before entry into force

Initialling is defined as the approval of a contractual text by appending initials. Negotiators can in this way provisionally draw up the negotiated contractual text of DTAs (and other agreements based on international law). The initialled text is at first confidential. The cantons and the business associations concerned are notified of the content in a brief report and invited to submit their comments.

The agreement is published only after it has been signed. The Federal Council authorises the signing of the agreement. The FDF will then prepare a dispatch for the attention of parliament, which is responsible for approving the DTAs. If the partner State has also approved the agreement, it may come into force. The date of entry into force depends on the agreement concerned. The provisions in the DTA apply in accordance with the rules adopted in the agreement, normally from the 1 January of the calendar year following the date of entry into force.

Under the current practice, DTAs that provide for significant additional obligations are subject to an optional referendum. In the view of the Federal Council, the first double taxation agreement with the new administrative assistance provisions approved by parliament should therefore be subject to an optional referendum. However, the final decision as to whether or not a double taxation agreement should be subject to an optional referendum rests with parliament.

Switzerland and Denmark sign revised double taxation agreement