INTERNATIONAL TAX PLAZA - Switzerland and Estonia sign protocol to amend double taxation agreement

(August 28, 2014)

On August 25, 2014 Switzerland and Estonia signed a protocol to amend the convention between the government of the Republic of Estonia and the Swiss Federal Council for the avoidance of double taxation with respect to taxes on income and on capital from June 11, 2002. The changes included in the protocol are a.o.:

A building site or construction or installation project constitutes a permanent establishment only if it lasts more than 12 months (9 months under the current DTA);
Dividend withholding tax rate is lowered to 10% (15% under the current DTA) or 0% in case of a direct shareholding of 10% in the company paying the dividends for at least 1 year prior to the payment of the dividend (5% in case of a 20% shareholding under the current DTA without a minimum holding period);
No interest withholding tax to be withheld (10% under the current DTA);
No royalty withholding tax to be withheld (10% (or 5% in specific cases) under the current DTA);
Changes to the definition of a 'real-estate company' as used in Article 13 (Capital gains), paragraph 4;
A new Article 26 (Exchange of information).

For the protocol to come into force it still has to be approved by the parliaments of both countries.

Click here to be forwarded to the text of the protocol as it is published on the website of the Swiss Federal Department, which will open in a new window.