Bilateral Tax Agreements

Bilateral Tax Agreements / Treaties between Switzerland and other countries


Shareholders resident outside of Switzerland who invest in the exciting and profitable Swiss market need to be aware of tax implications on their assets. SUISHARE hopes that this set of information will assist in your understanding:


Bilateral Tax Agreements that have been implemented over the last 5 years replace or widen the former old double taxation agreements. Essentially the Bilateral Tax Agreements are a tool against tax evasion but with a huge upside of improving the relations between two countries, encouraging foreign investment and trade, and its main purpose, reducing tax evasion by placing a withholding tax on profits. The arrangement between two jurisdictions also mitigates the problem of double taxation that can occur when tax laws consider an individual or company to be a resident of more than one jurisdiction. This is a real plus for investors.
Bilateral tax agreements deal with many issues such as taxation of different categories of income (business profits, royalties, capital gains, employment income, etc.), methods for eliminating double taxation (exemption method, credit method, etc.), and provisions such as mutual exchange of information between countries and assistance in tax collection.


The Swiss government relaxed its banking secrecy laws in March 2009, agreeing to adopt Organisation for Co-operation and Development (OECD) standards on administrative assistance in tax matters.


Switzerland is negotiating with as many countries as possible to accept withholding tax deals in an effort to avoid an automatic exchange of banking information. Switzerland has already signed treaties with many countries.


For example concerning the deal with Germany; the treaty legalizes the undeclared Swiss bank accounts held by Germans citizens. Swiss banks would deduct a one-off levy for backdated assets and then impose a withholding tax on future income earned for those account holders who do not want to reveal their identities to the German authorities.


Estimates have been that these levies would yield up to €11 billion (SFr13 billion) to the German tax coffers.


The Withholding tax approach is Switzerland’s response to increasing international initiatives against banking secrecy. It is a convincing and logical alternative to the automatic exchange of information.


As of March 2016, Switzerland has signed 53 Double taxation agreements  (DTAs) in accordance with the international standard, of which 46 are in force, and 10 tax information exchange agreements (TIEAs), of which 7 are in force (status as at 21 March 2016).


Specific information on a per country basis can be found at: