Federal Council adopts dispatch on double taxation agreement with Oman

Bern, 14.10.2015 – Today, the Federal Council adopted the dispatch on the new double taxation agreement (DTA) with Oman and submitted it to Parliament for approval. The agreement will promote bilateral economic relations and contains provisions on the exchange of information upon request in accordance with the OECD standard.

Aside from the exchange of information, Switzerland and Oman have in particular agreed that dividends can be taxed at a maximum rate of 15% in the source state. Dividend payments from significant holdings can be subject to a maximum of 5% tax in the source state, and dividend payments to pension funds and the contracting states are taxable solely in the recipient’s state of domicile. Interest may be taxed at no more than 5% in the source state. Moreover, provision has been made for taxation solely in the recipient’s state of domicile for certain interest payments. The source state can tax royalty payments at a rate of no more than 8%, whereby lower maximum tax rates for royalty payments agreed by Oman with third countries will apply also for Switzerland by virtue of a most favoured nation clause. Pensions may also be taxed at source. Furthermore, it has been stipulated that contributions to pension funds in the other country are deductible.

The new double taxation agreement was signed on 22 May 2015. Following parliamentary approval in both countries, it will probably enter into force in 2016. To date, Switzerland has signed 53 DTAs and nine tax information exchange agreements (TIEAs) that are in line with the international exchange of information standard, and of these, 41 DTAs and seven TIEAs are in force.