Aside from the exchange of information, Switzerland and Romania have in particular agreed withholding tax exemption for dividend payments from significant holdings of at least 25% in the capital of the company making the payment, as well as for dividend payments to pension funds. In future, interest payments will be subject to withholding tax of no more than 5%. In addition most-favoured-nation treatment was agreed for Switzerland in an arbitration clause. Should Romania negotiate an arbitration clause with another country, the clause agreed between Switzerland and Romania would automatically become applicable.

The revised DTA with Romania contains the rule on interpretation recommended in mid-February by the Federal Council in the case of administrative assistance. After negotiations finished, a report on the revised agreement was submitted to the cantons and business associations concerned for their comments. They largely approved the signing of the agreement.

Stages between signature and entry into force.

After a double taxation agreement (DTA) has been signed, the Federal Council submits the signed agreement together with a dispatch to parliament for approval. Parliament also decides whether or not a DTA will be subject to an optional referendum. Under the current practice, DTAs that provide for significant additional obligations are subject to an optional referendum. The first ten DTAs with an extended administrative assistance clause in accordance with the internationally applicable standards were approved by parliament on 18 June 2010.

The agreement can enter into force once the partner state has provided its approval. Once ratified, the agreement will enter into force. This occurs either when diplomatic notes are dispatched or when the instruments of ratification are exchanged. The point in time of entry into force depends on the agreement reached. Most of the first ten approved agreements have since entered into force. The application of the provisions is based on the arrangements agreed in the DTA. Usually, the new provisions are applicable from 1 January of the calendar year following the date of entry into force.

Switzerland and Romania sign revised double taxation agreement