Global

Details

  • Service: Tax, International Corporate Tax, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 1/25/2013

Switzerland - Tax treaty with Hong Kong enters into force 

January 25: An income tax treaty between Switzerland and Hong Kong entered into force on 1 January 2013.

Effective date provisions

In Switzerland, the income tax treaty is effective:


  • In respect of taxes withheld at source on amounts paid or credited on or after 1 January 2013
  • In respect of other taxes, for tax years beginning on or after 1 January 2013

The income tax treaty provisions are effective in Hong Kong for any year of assessment beginning on or after 1 April 2013.

Withholding tax rates

The treaty provides favorable withholding tax rates for dividends, interest payments and royalties.


 

Switzerland non-treaty withholding rate

Treaty withholding rate

Dividends

35%

0% / 10%*

Interest

35%

0%

Royalties

0%

3%


The Switzerland-Hong Kong income tax treaty contains provisions to deny relief when the main purpose (or one of the main purposes) of an arrangement is to take advantage of the reduced withholding tax rates.


*Withholding tax on dividends is reduced to 0% if the beneficial owner of the dividends is (1) a company, which holds directly at least 10% of the capital of the company paying the dividends; or (2) a pension plan; or (3) the Hong Kong Monetary Authority.


Read a January 2013 report prepared by the KPMG member firm in Switzerland: Effects of the new Double Taxation Agreement between Switzerland and Hong Kong




©2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.


The KPMG logo and name are trademarks of KPMG International.


KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.


The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.


Direct comments, including requests for subscriptions, to us-kpmgwnt@kpmg.com.
For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.

 

Share this

Share this

Subscribe

Subscribe to receive the latest TaxNewsFlash email alerts (you must select the option for TaxNewsFlash)


Already a Subscriber? Login


Not a member? Subscribe now

Contact us