Switzerland has signed more than
80 treaties for the avoidance of double taxation, thus establishing a legal framework for the
taxation of foreign entities operating in this country. Many of the
treaties signed by
Switzerland follow the regulations imposed by the
Organisation for Economic Cooperation and Development (OECD).
German investors interested in
opening a company in Switzerland can benefit from the provisions of the
double taxation treaties, as the representatives of the state have concluded a
tax agreement with the
German authorities. The act was first signed in 1972 and its latest updates were concluded in 2011.
Our team of company formation agents in Switzerland can provide more details on the
taxation system available here.
Updated provisions of the Swiss –German DTT
The
double taxation treaty signed by
Switzerland and Germany was revised last time in 2011, when the contracting parties have modified several provisions of the
agreement. An important aspect of the
treaty refers to the
shareholder’s ownership.
Under the new regulation, a
shareholder can benefit from
tax exemptions on the
distribution of the dividends if he or she owns at least 10% of the voting rights in the respective
company (previous, it was necessary to own at least 20% of the voting rights).
Those who want to
open a Swiss company should know that the regulation is applicable only in the situation in which the respective owner will own those 10% voting rights for a period of minimum one year.
Our team of company formation representatives in Switzerland can offer more information in this sense.
Provisions concerning the German citizens
German investors interested in
company formation in Switzerland should know that their
investments in Switzerland will be taxed at a rate ranging from 19%-34%. The value of the rate is established in accordance with the investment field in which the
company is operating.
The new treaty between the two states provides new regulations for the withholding taxes. The distribution of dividends was lowered from a participation rate of 20% to only 10%.