In case you reside in the Netherlands and you receive an income from another country, respectively from Switzerland, or vice versa, it is important to know that the Netherlands and Switzerland have signed a double tax treaty that establishes which country can tax the income.
The Netherlands and Switzerland have signed their initial double tax treaty in 1951, after which there was an additional protocol that referred to the exchange of tax information. At the end of 2011, Switzerland and the Netherlands signed a new double tax treaty called the “New Treaty”. This agreement came into effect in 2012. The New Treaty is created after the Organization for Economic Co-operation and Development Model Tax Convention and it adopted important changes compared to the previous one. Our Dutch accountants can offer you detailed information on what these changes imply.
Place of residence under the Swiss-Dutch double tax treaty
According to the new Swiss-Dutch double tax treaty, persons due to pay taxes in either Switzerland or the Netherlands can benefit from the rules of the agreement based on their place of residence, management or domicile. Businesses can take advantage of the agreement based on the place where they effectively run their management. The new treaty also mentions the expressions “permanent establishment” which characterizes any building or construction site on the ground of the other country if it is kept for minimum 12 months.
Main aspects of the new Switzerland-Netherlands double tax treaty
The new Switzerland-Netherlands double tax treaty presents some of the following provisions:
• Exchange of information: Because of the international pressure, Switzerland reviewed its treaty policy regarding the exchange of information. As a result, Switzerland approved to exchange information related to tax issues upon request. Our Dutch accounting firm can provide further details on this matter;
• Dividends: an exemption applies to shareholdings of minimum 10%. The dividend withholding taxation stays at 15% for dividends dispersed to private persons and companies with a shareholding of maximum 10%;
• Capital gains: The new Switzerland-Netherlands double tax agreement allows the possibility of having capital gains on shares or other company rights in special real estate companies taxed in the country where it is located;
• Other provisions. Our accountants in Netherlands can offer more details on what these other provisions consist of.
If you require more information on the double tax treaty between Switzerland and the Netherlands, we invite you to get in touch with our accounting firm in the Netherlands.