Switzerland – Albania Amending Protocol Signed

On 9 September 2015, Switzerland and Albania signed an Amending Protocol to their existing Income and Capital Tax Treaty of 1999.

The amending protocol will come into force after the two countries exchange ratification instruments. The provisions of the amending protocol will have effect from 1 January of the calendar year next following that in which the agreement enters into force.

Amongst other changes put forward by the Amending protocol, a 0% withholding tax is introduced on interest paid to a Pension Scheme. The standard withholding tax rate on interest remains at 5%.

It is understood that the term “pension scheme” as used in the Amending Protocol means any plan, scheme, fund, foundation, trust or other arrangement established in a Contracting State which is regulated by and generally exempt from income taxation in that State and operated principally to administer or provide pension or retirement benefits or to earn income for the benefit of one or more such schemes, and includes the following:

a. in Albania, any pension scheme covered by:

i. Law no. 10197 dated 10.12.2009 for Funds of Voluntary Pensions;
ii. Law no. 7703 dated 11.05.1993 for Social Insurance in the Republic of Albania;
iii. Law no. 10142 dated 15.05.2009 for Supplementary Social Insurance for Military of the Armed Forces, Employees of the State Police, of the National Guard, of the Intelligence Service, of the Penitentiary Police, of the Fire Police, of the Rescue Police, and of the Internal Audit Services in the Republic of Albania;
iv. Law no. 8097 dated 21.03.1996 for Supplementary State Pensions to Persons who performed Constitutional Functions and to State Employees;
v. Law no. 10139 dated 15.05.2009 for Supplementary State Pensions of Employees of Universities, High Education Institutions, Center for Albanian Studies, Academy of Science and all other Public Research Institutions in the Republic of Albania who do have Academic Titles;
vi. Law no. 150/2014 for Pensions of Miners;

b. in Switzerland, any pension schemes covered by:

i. the Federal Act on old age and survivors’ insurance, of 20 December 1946;
ii. the Federal Act on disabled persons’ insurance, of 19 June 1959;
iii. the Federal Act on supplementary pensions in respect of old age, survivors’ and disabled persons’ insurance, of 6 October 2006;
iv. the Federal Act on old age, survivors’ and disabled persons’ insurance payable in respect of employment or self-employment of 25 June 1982, including the nonregistered pension schemes which offer occupational pension plans; and
v. the forms of individual recognised pension schemes comparable with the occupational pension plans, in accordance with article 82 of the Federal Act on old age, survivors’ and disabled persons’ insurance payable in respect of employment or self-employment of 25 June 1982;

c. and any identical or substantially similar schemes which are established pursuant to legislation introduced after the date of signature of this Protocol as agreed between the competent authorities of the Contracting States.

The Amending Protocol also introduces an Article on the Exchange of Information.