Double Taxation Agreement Hong Kong Switzerland
In other cases, the withholding tax rate is 10%. Interest is generally exempt from withholding tax and the limit of the tax that the source state can collect on license payments is 3%. Hong Kong cannot tax Swiss companies that do not have a stable headquarters in Hong Kong, except under certain conditions and for a service activity of more than 270 days. The agreement contains an arbitration clause as well as a provision on the exchange of information in accordance with OECD standards. The protocol became necessary to appease the European Commission, which considered that the agreement could be contrary to the European treaty. Threatened by a possible challenge before the Court of Justice of the European Communities, Britain and Switzerland have agreed that account holders who have already paid the 35% withholding tax due under the EU Savings Tax Directive will be subject to a final withholding tax of 13% to honour the tax debt on interest payments. On 13 March 2009, the Federal Council announced Switzerland`s intention to adopt the OECD standards on administrative assistance in tax matters, in accordance with Article 26 of the OECD Model Convention. The Decision authorises the exchange of information with other countries in specific cases where a concrete and reasoned request has been made. The Federal Council has decided to withdraw the corresponding reservation to the OECD Model Convention and to start negotiations on the revision of the double taxation conventions.
However, it states that Swiss banking secrecy remains intact. Switzerland has a network of social security agreements which currently have more than 30 lawyers. Switzerland has also concluded a bilateral agreement with the European Union that covers all 27 EU countries and more or less adapts the rules already in force within the European Union. . . .