Global Daily Tax News, Switzerland Set To Ratify Angolan DTA, German Protocol, (Jun 17, 2024)

The Swiss Federal Council has approved and tabled legislation for the ratification of a double tax agreement Protocol with Germany and a new double tax agreement with Angola.

Two dispatches were approved by the Federal Council on both agreements at its June 14, 2024, meeting.

In particular, the DTA Protocol with Germany would add provisions into the two countries' agreement to counter base erosion and profit shifting.

Specifically, the agreement will include a new preamble that states that the DTA is not intended to create opportunities for non-taxation or reduced taxation through tax evasion or avoidance, or treaty shopping. Further, the agreement will newly include provisions to counter treaty abuse, prevent the artificial avoidance of permanent establishment status, neutralize the effects of hybrid mismatch arrangements, and improve dispute resolution mechanisms.

Other changes are intended to clarify the rules for cross-border workers, based on the outcome of engagement between the two states in the past over difficulties and doubts regarding the interpretation and application of the agreement.

The Protocol will also include new provisions governing public sector entities and associated taxing rights.

The Swiss Government said the Protocol "does not include any major changes to the allocation of taxing rights," noting it will improve "legal certainty and cooperation between the two contracting states."

Regarding the Angola double tax agreement, the Swiss Government said the agreement is based largely on the OECD model agreement and includes similar provisions to tackle tax base erosion and profit shifting in line with the minimum standards.

The agreement also provides for the exchange of information on request.