Switzerland and Russia sign memorandum on financial dialogue and revised double taxation agreement

Berne, 25.09.2011 - On Saturday, on the fringes of the Annual Meeting of the International Monetary Fund in Washington, Federal Councillor Eveline Widmer-Schlumpf and Russia's Deputy Prime Minister and Finance Minister, Alexei Kudrin, signed a memorandum on cooperation between Switzerland and Russia on financial matters. A protocol to amend the double taxation agreement (DTA) was signed at the same time. The revised DTA also contains provisions on the exchange of information in line with the internationally applicable standards.

The signing of a Memorandum of Understanding (MoU) on financial matters laid the foundation stone for intensive dialogue between the Federal Department of Finance and the Russian Finance Ministry. The MoU dovetails perfectly with the Federal Council's overall strategy for strategic partnership with Russia. Intensified contacts on important emerging markets, for example, will enable Switzerland to strengthen its influence on shaping the global financial system and discuss bilateral concerns regarding financial matters in order to make the most of development potential and identify problem areas early on.

Revised double taxation agreement signed

On the same occasion, Finance Minister Eveline Widmer-Schlumpf and her Russian counterpart, Alexei Kudrin, signed a protocol to amend the DTA with respect to taxes on income and capital. Aside from the exchange of information, Switzerland and Russia have agreed, in particular, that the zero rate will generally be introduced for interest payments and that the residual tax on dividend payments to pension funds and the central banks of both countries will be eliminated. The country where the immovable property is situated should be given taxing power for the gains derived from the alienation of shares in real estate companies. Moreover, it has been agreed in the revised DTA that both countries will initiate negotiations on an arbitration clause as soon as Russia has agreed such a clause in a DTA with another country.

After negotiations finished, a report on the revised double taxation agreement was submitted to the cantons and business associations concerned for their comments. The vast majority approved the signing of the revised agreement.

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