Federal Council decides on next steps in avoidance of double taxation of permanent establishments
Bern, 22.04.2015 - During its meeting today, the Federal Council took note of the result of the consultation on the revision of the ordinance regarding the flat-rate tax credit in the case of permanent establishments (implementation of Pelli motion 13.3184). The legal basis for the ordinance is to be created first of all. This is to be incorporated into the dispatch on the third series of corporate tax reforms.
In terms of content, most of the consultation participants agreed to the implementation of the Pelli motion proposed by the Federal Council. The Federal Council has instructed the Federal Department of Finance (FDF) to create the legal basis first. It is to be included in the Federal Act on Tax-Related Measures to Strengthen the Competitiveness of Switzerland as a Business Location (third series of corporate tax reforms).
This amendment will affect foreign companies' permanent establishments in Switzerland which have their registered office in another country with which Switzerland has a double taxation agreement (DTA). If the permanent establishment receives dividend, interest or royalty payment revenue upon which a non-recoverable withholding tax is levied from a third country with which Switzerland has signed a DTA, double taxation can arise at present. This can be avoided with the envisaged amendment to the ordinance.
Address for enquiries
Simone Bischoff, Federal Tax Administration FTA
Tel. 058 462 73 69, simone.bischoff@estv.admin.ch
Documents
Publisher
The Federal Council
https://www.admin.ch/gov/en/start.html
Federal Department of Finance
https://www.efd.admin.ch/efd/en/home.html
