Switzerland and Bulgaria sign revised double taxation agreement
Bern, 19.09.2012 - Today in Sofia, Switzerland and Bulgaria signed a new double taxation agreement (DTA) in the area of taxes on income and capital. It replaces the agreement of 28 October 1991 and contains provisions on the exchange of information in accordance with the international standard applicable at present. It is largely in line with Switzerland's agreements policy. The new DTA will contribute to the further positive development of bilateral economic relations.
Aside from an OECD administrative assistance clause, Switzerland and Bulgaria have agreed that both countries may levy withholding tax of no more than 10% on gross dividend amounts. If, however, a company holds a stake of at least 10% in the capital of the distributing company for at least a year, the dividends will be exempt from withholding tax. Moreover, there will be no withholding taxes on dividends paid to the national banks of the two countries or to pension funds. Regarding interest, both countries may levy withholding tax not exceeding 5%. However, interest payments between associated enterprises (stake of 10% for at least one year), for example, will not be subject to any withholding tax. There will be no withholding tax on royalty payments either.
After negotiations finished, a report on the new DTA with Bulgaria was submitted to the cantons and the business associations concerned for their comments. They approved the signing. The new agreement still has to be approved by parliament in both countries before it can come into force.
Address for enquiries
Pascal Duss, State Secretariat for International Financial Matters, tel. +41 (0)31 322 71 57, pascal.duss@sif.admin.ch
Documents
Publisher
Federal Department of Finance
https://www.efd.admin.ch/efd/en/home.html
