Switzerland Adopts Dispatch On BEPS Multilateral Convention

; posted on
August 23rd, 2018

The Swiss Federal Council adopted the dispatch on the multilateral convention to implement tax treaty related measures to prevent base erosion and profit shifting (BEPS). The dispatch was submitted to Parliament.

Bilateral DTA amendments

The BEPS convention will initially adjust the Swiss double taxation agreements (DTAs) with Argentina, Austria, Chile, the Czech Republic, Iceland, Italy, Lithuania, Luxembourg, Mexico, Portugal, South Africa, and Turkey to the tax treaty related minimum standards defined within the framework of the BEPS project. These countries are prepared to agree with Switzerland on the precise wording of the DTAs to be adapted via the BEPS convention.

The tax treaty related BEPS minimum standards can be agreed by means of the BEPS convention or, alternatively, via bilateral DTA amendments. In this way, Switzerland has already incorporated these minimum standards into the DTAs with Brazil, Latvia, Kosovo, Pakistan, Saudi Arabia, the United Kingdom, and Zambia. Further DTA revisions are ongoing.

List of Reservations and Notifications

A list of reservations and notifications is made in the dispatch to:

  • determine which tax treaties will be covered under the MLI;
  • notify which articles under the MLI are chosen to apply;
  • reserve the right not to apply certain articles under the MLI.

Generally, Switzerland holds reservations on most of the articles including Art.3 transparent legal entities, Art.4 dual resident entities, Art.8 dividend transfer transaction, and Art.9 to Art.16 etc.

Source: Swiss Federal Council

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