Switzerland and Hong Kong have reportedly signed a bilateral double taxation agreement (DTA), extending administrative assistance in tax matters in accordance with the Organization for Economic Cooperation and Development's (OECD) standard. According to the Swiss Federal Administration, the administrative assistance clause is in line with the key points agreed by the Federal Council. The agreement with Hong Kong marks the twenty-fourth DTA containing the extended administrative assistance clause.
Following the Federal Council decision of March 13, 2009 to extend administrative assistance in tax matters, Switzerland has initiated corresponding negotiations with numerous states. Indeed, since then, the Federal Council has approved the first ten dispatches of revised DTAs conforming to Article 26 of the OECD's Model Convention, and has submitted them to parliament for approval.
Switzerland's Federal Administration stated that: "Along with extending administrative assistance in tax matters, Switzerland has also been able to negotiate various economic benefits with these states. This policy will be pursued and further negotiations are already envisaged with important countries. Thanks to the agreement with Hong Kong, it has been possible to establish the basis for strengthening the bilateral economic relations and eliminate competitive disadvantages."
This is an interesting chess move by one of the key players in the International Tax Competition game.
While many smaller centres rush to sign more invasive TIEAs Switzerland continues to cleverly pursue the signing of DTAs with mutual benefits for each country wherever possible. With information exchange and fiscal transparency becoming part of the fabric of the International Business Stage in the 21st century DTAs and low tax (as opposed to nil tax) resident companies are without doubt the way forward for many nil or low tax centres. For example just as Mauritius has become the gateway for investment into Indian a concerted (Offshore practitioner led) push by Seychelles to sign DTAS with key African nations could see Seychelles become the investment gateway into Africa.
Following the Federal Council decision of March 13, 2009 to extend administrative assistance in tax matters, Switzerland has initiated corresponding negotiations with numerous states. Indeed, since then, the Federal Council has approved the first ten dispatches of revised DTAs conforming to Article 26 of the OECD's Model Convention, and has submitted them to parliament for approval.
Switzerland's Federal Administration stated that: "Along with extending administrative assistance in tax matters, Switzerland has also been able to negotiate various economic benefits with these states. This policy will be pursued and further negotiations are already envisaged with important countries. Thanks to the agreement with Hong Kong, it has been possible to establish the basis for strengthening the bilateral economic relations and eliminate competitive disadvantages."
This is an interesting chess move by one of the key players in the International Tax Competition game.
While many smaller centres rush to sign more invasive TIEAs Switzerland continues to cleverly pursue the signing of DTAs with mutual benefits for each country wherever possible. With information exchange and fiscal transparency becoming part of the fabric of the International Business Stage in the 21st century DTAs and low tax (as opposed to nil tax) resident companies are without doubt the way forward for many nil or low tax centres. For example just as Mauritius has become the gateway for investment into Indian a concerted (Offshore practitioner led) push by Seychelles to sign DTAS with key African nations could see Seychelles become the investment gateway into Africa.
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