BERN: Switzerland and Oman have signed a new double tax agreement (DTA) that sets withholding tax rates for dividends, interest, and royalty income.
Under the DTA, dividends will be taxed at a maximum rate of 15 percent at source. Dividend payments from significant holdings will be subject to a five percent rate in the source state. Dividend payments to pension funds and the contracting state will be taxable solely in the recipient’s state of domicile.
Interest will be taxed at no more than five percent in the source state. Certain interest payments will be taxable only in the recipient’s state of domicile. Royalty payments will be subject to tax of no more than eight percent in the source state. A most favored nation clause will ensure that lower maximum royalty tax rates agreed by Oman with third countries will also apply for Switzerland.
The DTA also includes provisions on the automatic exchange of information in line with the international standards. The cantons and business associations have approved the signing of the DTA. It must now be approved by Parliament. Switzerland has signed 51 DTAs and eight tax information exchange agreements (TIEAs); 41 of these DTAs and three TIEAs are in force.
