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Agreement on the Taxation of Savings Income - Zinsbesteuerungsabkommen - Accord sur la fiscalité de l'épargne

Agreement

between the European Community and the Swiss Confederation providing for measures equivalent to those laid down in Council Directive 2003/48/EC on taxation of savings income in the form of interest payments

THE EUROPEAN COMMUNITY, hereinafter reffered to as "Community",

and

THE SWISS CONFEDERATION, hereinafter referred to as "Switzerland",

or as the "Contracting Parties",

HAVE AGREED TO CONCLUDE THE FOLLOWING AGREEMENT:

[...]

Art. 15 Dividends, interest and royalty payments between companies

1. Without prejudice to the application of domestic or agreement-based provisions for the prevention of fraud or abuse in Switzerland and in Member States, dividends paid by subsidiary companies to parent companies shall not be subject to taxation in the source State where:
    - the parent company has a direct minimum holding of 25% of the capital of such a subsidiary for at least two years, and.
    - one company is resident for tax purposes in a Member State and the other company is resident for tax purposes in Switzerland, and,
    - under any double tax agreements with any third States neither company is resident for tax purposes in that third State, and,
    - both companies are subject to corporation tax without being exempted and both adopt the form of a limited company(1).
However, Estonia may, for as long as it charges income tax on distributed profits without taxing undistributed profits, and at the latest until 31 December 2008, continue to apply that tax to profits distributed by Estonian subsidiary companies to their parent companies established in Switzerland.

2. Without prejudice to the application of domestic or agreement--based provisions for the prevention of fraud or abuse in Switzerland and in Member States, interest and royalty payments made between associated companies or their permanent establishment shall not be subject to taxation in the source State, where:
    - such companies are affiliated by a direct minimum holding of 25 % for at least two years or are both held by a third company and in the capital of the second company for at least two years, and;
    - Where a company is resident for tax purposes or a permanent establishment is located in a Member State and the other company is resident for tax purposes or other permanent establishment situated in Switzerland, and;
    - under any double tax agreements with any third States none of the companies is resident for tax purposes in that third State and none of the permanent establishments is situated in that third State, and;
    - all companies are subject to corporation tax without being exempted in particular on interest and royalty payments and each adopts the form of a limited company (1)
However, where Council Directive 2003/49/EC of 3 June 2003 on a common system of taxation applicable to interest and royalty payments made between associated companies of different Member States provides for a transitional period as regards a given Member State tha State shall only ensure payments after the expiry of that period.

3. Existing double taxation agreements between Switzerland and the Member States which provide for a more favourable taxation treatment of dividends, interest and royalty payments at the time of adoption of this Agreement shall remain unaffected

1 With regard to Switzerland, the term "limited company" covers:
    - société anonyme/Aktiengesellschaft/società anonima;
    - société à responsabilité limitée/Gesellschaft mit beschränkter Aftung/società a responsabilità limitata;
    - société en commandite par actions/Kommanditaktiengesellschaft/società in accomandita per azioni.

[...]

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