Switzerland and Latvia sign protocol of amendment to double taxation agreement
Bern, 03.11.2016 - On 2 November 2016 in Riga, Switzerland and Latvia signed a protocol of amendment to their double taxation agreement (DTA) in the area of taxes on income and capital. It contains an administrative assistance clause in accordance with the current international standard for the exchange of information upon request and several provisions from the OECD and G20 project to combat base erosion and profit shifting (BEPS project).
Aside from the new provision on the exchange of information upon request, the agreement was also revised in a number of other respects. In particular, the agreement will introduce lower taxation of levies and distributed profits on qualified participations.
The protocol of amendment also contains an abuse clause which, in line with the wording of the BEPS project, is based on the principal purpose provision of an arrangement or a transaction (PPT rule). This clause to prevent the granting of treaty benefits is consistent in its basic features with the abuse provisions to which Switzerland has agreed in recent years in many of its DTAs. Finally, legal certainty is increased for taxpayers with the inclusion of an arbitration clause.
The protocol of amendment to the DTA was submitted to the cantons and business associations 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.
So far, Switzerland has signed 54 DTAs that are in line with the international standard on the exchange of information; 47 of these are in force.Address for enquiries
Bilateral Tax Issues and Double Taxation Treaties Section, State Secretariat for International Financial Matters SIF
Tel. +41 58 462 71 29, dba@sif.admin.ch
Publisher
Federal Department of Finance
https://www.efd.admin.ch/efd/en/home.html
