Switzerland and Singapore sign double taxation agreement

Bern, 24.02.2011 - Today in Singapore, Switzerland and Singapore signed a double taxation agreement (DTA) in the area of taxes on income and capital which will replace the current agreement which dates back to 1975. The DTA will contribute to the further positive development of bilateral economic relations. The DTA also contains provisions on the exchange of information in line with the internationally applicable standards.

Aside from the exchange of information, Switzerland and Singapore have in particular agreed upon a withholding tax of 5% on dividend payments from holdings of at least 10% in the capital of the company making the payment. Dividend payments to the national banks of both of the countries in the agreement will be exempt from withholding tax. In future, interest payments will be subject to a withholding tax of a maximum of 5%. Interest payments to the national banks of both countries in the agreement, as well as interest payments between banks in Switzerland and Singapore will in future be exempt from withholding tax.

The DTA with Singapore contains the rule on interpretation in the case of administrative assistance recommended in mid-February 2011 by the Federal Council. After negotiations finished, a report on the revised agreement was submitted to the Conference of Cantonal Finance Directors and the 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.

Address for enquiries

Double taxation agreements:
Tel.: +41 31 322 71 29
Fax: +41 31 324 83 71


Federal Department of Finance