Switzerland and Iceland sign double tax agreement

Switzerland and Iceland, on July 10, signed a double taxation agreement which includes exchange of information provisions and an arbitration clause. The agreement replaces a 1988 double tax agreement. Under the  new agreement, royalties are subject to no more than 5 percent tax in the source state. The parties agreed to a withholding tax exemption for divided payments from significant holdings of at least 10 percent and for divided payments to pension funds and national banks. The agreement specifies that pension contributions in the other country are deductible. For more details, see press release.