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Switzerland – Germany Double Tax Treaty

Switzerland – Germany Double Tax Treaty

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%. 

Please contact our team of company formation consultants in Switzerland for more details on the Swiss-German double tax treaty