Switzerland, South Korea sign tax treaty protocol

Switzerland and South Korea today signed a protocol to their 1980 tax treaty adding a provision designed to bring the treaty in compliance with minimum standards set by OECD, G20, and other countries in 2015 as a result of the OECD/G20 base erosion profit shifting (BEPS) project.

Specifically, Switzerland and South Korea have added a to their tax treaty a clause with a “principal purpose” test which aims to prevent tax treaty shopping and other abuses by multinationals.

The new Switzerland-South Korea tax treaty protocol is not yet in force.