Switzerland’s Federal Council on April 18 approved a new tax treaty with Zambia and a protocol amending Switzerland’s tax treaty with Ecuador.
The new tax treaty with Zambia was signed August 2017. The treaty reduces withholding tax on dividends to a maximum of 15% with qualified participations being taxed at no more than 5%. Withholding tax on interest is reduced to a maximum of 15 percent.
The Swiss-Zambia agreement also adds provisions consistent with the OECD/G20 base erosion profit shifting plan agreements designed to reduce tax treaty shopping, contains provisions on arbitration of tax disputes, provides for the exchange of information on request, and includes an administrative assistance clause.
The protocol to the Switzerland-Ecuador treaty was signed by the two nations In July 2017. The agreement provides for the exchange of information by tax authorities upon request.
The Federal Council said that the cantons and business circles concerned have welcomed the conclusion of both agreements.
Both agreements must now be approved by Swiss parliament. Steps must also be taken in both Ecuador and Zambia before the agreements will enter into force.
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