Switzerland - Germany: Double Taxation Agreement

A revised double taxation agreement (DTA) between Switzerland and Germany has been initialled by the Swiss Federal Councillor Hans-Rudolf Merz and the German Finance Minister Wolfgang Schäuble in Berlin. This DTA will provide administrative assistance in tax matters in accordance with the Organisation for Economic Cooperation and Development’s standard.

Switzerland has also been able to negotiate various benefits for the country as a business location noting that the text of the DTA will be published once the agreement has been signed.

Mr. Hans-Rudolf Merz and Mr. Wolfgang Schäuble also discussed the issue of the use of purchased bank client data by the German tax authorities. A bilateral working group was mandated by the ministers in order to clarify unresolved financial and tax issues for the signing of the DTA.

The working group will clarify the following issues:

• Possibilites for arranging the taxation of German resident's untaxed assets that are invested in Swiss financial institutions;
• Ensuring the taxation - in the form of a final withholding tax - of the ongoing investment income from assets that are invested in Swiss financial institutions by German residents, as well as the transfer of such assets, particularly by way of inheritance or endowment;
• Market access; based on the solutions proposed by the relevant supervisory authorities, examining extended market access for Swiss banks in Germany;
• Accompanying work associated with the signature of the Protocol of Amendment to the bilateral double taxation agreement, including matters regarding the handling of the purchase of bank data and comprehensive information for Switzerland on this issue.