Almost 10 years have passed since the Protocol of Amendment to the Double Tax Treaty (DTT) between Switzerland and the USA was signed by the two countries on 23 September 2009. On 17 July 2019, the US Senate finally approved the amending protocol. The Swiss Federal Assembly approved it on 18 June 2010.
This essentially entails the following changes:
- The exchange of information on request in accordance with international standards; requests for information can be made from the entry into force of the Protocol; requests for information on financial accounts must concern cases from 23 September 2009; the distinction between tax evasion and tax fraud no longer applies in accordance with international standards; group requests are now also permitted in cases of tax evasion.
- Dividends paid to pension plans (pillar 3a) will be exempt from withholding tax from 1 January 2020; previously only dividends paid to occupational pension plans (pillar 2) were exempt.
- A new mandatory arbitration clause has been introduced to avoid double taxation in the event that no agreement is reached in the mutual agreement procedure.
The State Secretariat for International Financial Matters (SIF) speaks of a milestone in tax relations between Switzerland and the USA, which should now pave the way for a general revision of the Swiss-US DTT. This means above all improvements to the double taxation agreement dating from 1996, such as the reduction of withholding tax to 0% (so-called ""zero rate"") on dividends from qualifying investments.
The Protocol of Amendment will enter into force when the instruments of ratification are exchanged.
Sources:
https://www.sif.admin.ch/sif/en/home/dokumentation/fokus/us-senat-gibt-gruenes-licht-zum-aenderungsprotokoll.html
https://www.admin.ch/gov/en/start/documentation/media-releases.msg-id-29183.html
