(May 22, 2015) 

On May 22, 2015 the Swiss Federal Department of Finance issued a press release announcing that on May 22, 2015 Switzerland and Oman signed an Agreement for the Avoidance of Double Taxation with respect to Taxes on Income (Hereafter: DTA). Although signed, the Agreement has not yet entered into force. For the DTA to enter into force, the respective ratification procedures have to been finalized in both countries.

 

Paragraph 3 of Article 5 of the DTA (“Permanent establishment”) determines that a building site, construction or installation project constitutes a permanent establishment only if it lasts more than nine months.

 

With respect to withholding taxes on dividends Paragraph 2 of Article 10 of the DTA (“Dividends”) determines the following:

However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident and according to the laws of that State, but if the beneficial owner of the dividends is a resident of the other Contracting State, the tax so charged shall not exceed:

a)    5 per cent of the gross amount of the dividends if the beneficial owner is a company (other than a partnership) which holds directly at least 10 per cent of the capital of the company paying the dividends;

b)    15 per cent of the gross amount of the dividends in all other cases.

 

Paragraph 2 of Article 11 of the DTA (“Interest”) limits the interest withholding taxes to be withheld by the Source State to a maximum of 5% of the gross amount of the interest.

 

Paragraph 3 of Article 11 of the DTA (“Interest”) is interesting since one of the situations mentioned in which the Source State is not allowed to withhold withholding taxes over interest payments made to the extent that such interest is paid on intercompany loans. (NB More situations are mentioned in which the Source State is not allowed to withhold withholding taxes over interest payments).

 

Paragraph 2 of Article 12 of the DTA (“Royalties”) limits the withholding taxes to be withheld over Royalties by the Source State to a maximum of 8% of the gross amount of the royalties.

 

Furthermore the new DTA contains an article arranging for a mutual agreement procedure (Article 24) and an article arranging the exchange of information (Article 25).

 

For further information click on the language of your choice to be forwarded to the text of the Agreement between the Swiss Confederation and the Sultanate of Oman for the Avoidance of Double Taxation with respect to Taxes on Income as available on the website of the Swiss Federal Department of Finance (English, French).

 

Are you looking for an other DTA? Then check our section DTAs & TIEAs a very efficient way to locate numerous DTAs.

 

 

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