Netherlands-Switzerland Double Tax Agreement

Netherlands-Switzerland Double tax agreement

The Netherlands and Switzerland have successfully drawn up a new agreement regarding the taxation of investment vehicles. This agreement serves as a clarification document for the tax treatment of some collective investment vehicles in both jurisdictions under the provision of the double tax treaty these two countries share. This agreement provides a number of tax advantages and reductions for investors or individuals that are dependant of income in both countries.

Collective investment vehicle treatment under the double tax treatment

The clarifications made for the double tax treaty between the Netherlands and Switzerland refer to fiscal investment institutions in the Netherlands, contractual funds in Switzerland and open-ended funds in Switzerland.

According to the recent changes in the agreement, a resident can claim a refund on the withholding tax on income obtained from the other state. This is only applicable if the resident from one of the states has a collective investment vehicle and benefits from more than 95% of that investments vehicle capital.

If the ownership is less than 95%, the owner can still claim a refund, but only to the amount of capital owed. The collective investment vehicle owners must also make an annual statement regarding the percentage of capital owed in that investment vehicle. The treaty states that each country is able to enforce appropriate control mechanisms if need be.

The double tax treaty between the Netherlands and Switzerland

This tax treaty signed between the two countries applies on the income levies of both states. According to the treaty, the withholding tax rates on dividends, interest and royalties are reduced and in certain cases completely eradicated. The provisions and tax benefits apply to residents of both countries who are subject to corporate or individual taxation.

The Netherlands have signed tax treaties with more than 80 countries. If you would like to know more about the Netherlands-Switzerland tax treaty and the Dutch treaty network, please do not hesitate to call us.