The Swiss Federal Council on Sept. 19 initiated a consultation on rules that would extend the flat-rate credit to permanent establishments in Switzerland that are domiciled in a country that has a direct tax agreement (DTA) with Switzerland.
The credit would alleviate double taxation that occurs if a permanent establishment receives revenue from dividends, interest, or royalty payments from a state with which Switzerland has a DTA and a non-recoverable withholding tax (residual tax) is levied on this revenue by the third state. The consultation will run until Dec. 23.
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