The UK-Switzerland double tax agreement will be updated with new provisions to tackle tax base erosion and profit shifting, with full effect from April 6, 2020.
The 2017 Protocol to the UK-Switzerland 1977 double tax agreement entered into force on July 19, 2019. It has been in effect for Swiss taxes since January 1, 2020, and for taxes withheld at source for both countries from the same date. It will have effect in the UK for income tax and capital gains tax purposes from April 6, 2020, and for corporate tax purposes from April 1, 2020.
In line with recommendations from the OECD, the revised DTA includes new provisions stating the treaty is not intended to enable taxpayers to inappropriately access tax benefits. It includes provisions to specifically prevent access to treaty benefits for arrangements where the principal purpose of that arrangement or transactions is to derive a tax benefit.
References to conduit arrangements within the treaty have been removed, and the wording in Article 9 on transfer pricing adjustments has been modernized.
Further, the treaty provides for improved dispute resolution provisions, which state: "Where a person considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with the provisions of this Convention, he may, irrespective of the remedies provided by the domestic law of those States, present his case to the competent authority of either Contracting State."
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