Switzerland and Portugal sign revised double taxation agreement

Bern, 25.06.2012 - Today in Lisbon, Switzerland and Portugal signed a protocol to amend the double taxation agreement (DTA) in the area of taxes on income and capital. It contains provisions on the exchange of information in accordance with the international standard applicable at present, as well as some adjustments to the existing agreement. The revised DTA will contribute to the further positive development of bilateral economic relations.

Aside from an OECD administrative assistance clause, Switzerland and Portugal have agreed that both countries may levy withholding tax of no more than 15% on gross dividend amounts. If, however, a company holds a stake of at least 25% in the capital of the distributing company for at least two years, the dividends will be exempt from withholding tax. Moreover, there will be no withholding taxes on dividends paid to the national banks of the two countries or to pension funds. The agreement also lays down the solutions contained in the agreement on the taxation of savings income for interest and royalty payments: interest and royalties paid amongst associated enterprises (stakes of 25% held for at least two years) will benefit from a withholding tax rate of zero from 1 July 2013.

After negotiations finished, a report on the revision of the DTA with Portugal was submitted to the cantons and the business associations concerned for their comments. They largely approved the signing. The revision still has to be approved by parliament in both countries before it can come into force.

Address for enquiries

François Bastian, State Secretariat for International Financial Matters
tel. +41 (0)31 322 71 52, francois.bastian@sif.admin.ch