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Switzerland-USA Double Tax Treaty

Switzerland-USA Double Tax Treaty

Convention between the Unites States of America and Switzerland

The Swiss Confederation and the United States of America have signed a convention for the avoidance of double taxation concerning taxes on income. The treaty was signed at Washington on October 2, 1996 and became effective under Article 19 on January 1, 1998.

The Convention and the Protocol offer maximum taxation rates applicable for various types of income for individuals who earn profits in the two countries. It also offers protection from double taxation of income and has provisions regarding the exchange of information.

If you are an American investor and want to open a company in Switzerland the provisions of the double taxation treaty can concern you and your company. 

General scope of the treaty

The double taxation treaty between the USA and Switzerland applies to individuals who are residents of both states and is applicable on taxes on income imposed on behalf of one of the Contracting States.

Under the general definitions of the treaty, a taxable person includes an individual, company, partnership, estate, trust or a body of persons. A company is a legal entity treated as a corporate taxpayer under the laws of the state in which it has its headquarters. A national is an individual that has nationality or citizenship in one of the Contracting States.

For information about the process of incorporating a Swiss company, you can request the services of our company registration experts in Switzerland. We also offer tax advise, so in case you need an accountant in Switzerland you can rely on our team.

Taxes covered by the treaty

The Convention for the avoidance of double taxation applies to the taxes imposed by the Contracting States, as such:

– in Switzerland: the taxes covered are the federal, cantonal and communal taxes on income; they include total income, earned income, property income, business profits, etc.

– in the United States of America: the federal income taxes imposed by the Internal Revenue Code and certain excise taxes.

The double taxation treaty applies to any similar taxes or taxes that are imposed in place of existing taxes after the signature date of the Convention. The two countries have the obligation to inform one another of any changes in their taxation laws.

Switzerland has signed over 80 double tax treaties with countries around the world. For a comprehensive list of these treaties, as well as detailed information about the general effect of the treaties you can contact our company incorporation specialists in Switzerland