Switzerland and Australia sign new double taxation agreement

Bern, 30.07.2013 - Today in Sydney, Switzerland and Australia signed a new double taxation agreement (DTA) in the area of taxes on income. It replaces the agreement applicable since 1981 and contains provisions on the exchange of information in accordance with the currently applicable international standard. The new DTA will contribute to the further positive development of bilateral economic relations between Switzerland and Australia, which is a member of the G20.

Aside from an OECD administrative assistance clause, Switzerland and Australia have agreed for instance that both countries may levy withholding tax of no more than 5% on gross dividends earned on significant interests (previously 15%); within a listed group, dividends will be completely exempt from withholding tax under certain conditions. Furthermore, no withholding tax will be levied on dividends and interest paid to pension funds. Interest paid to financial institutions will also be exempt from withholding tax. The withholding tax rate for royalties will be reduced from 10% to 5%. Moreover, leasing payments will no longer be considered as royalties, which corresponds to a withholding tax exemption. An arbitration clause has also been included in the agreement.

After negotiations finished, a report on the new DTA with Australia was submitted to the cantons and the business associations concerned for their comments. They approved the signing. The new agreement still has to be approved by parliament in both countries before it can come into force. It is subject to an optional referendum in Switzerland.

Address for enquiries

Urs Duttweiler, Bilateral Tax Issues Section, State Secretariat for International Financial Matters SIF
+41 31 322 72 52, urs.duttweiler@sif.admin.ch