Zambia and Switzerland sign new double taxation agreement
Switzerland and Zambia have signed a new double taxation agreement (DTA) in the area of taxes on income.
It replaces the agreement between Switzerland and the United Kingdom of 1954 which up to now applied to Switzerland and Zambia and will create legal certainty conducive to the further development of economic ties between the two countries.
In particular, the new agreement makes provision for dividends being taxed at source at a maximum rate of 15% and qualified participations being taxed at no more than 5%. With regard to interest, the withholding tax rate is generally 10% and for taxes the rate is 5%.
In addition, the new agreement contains an abuse clause in accordance with the recommendations of the OECD and G20 project to combat base erosion and profit shifting (BEPS project). Legal certainty will also be increased for taxpayers with the inclusion of an arbitration clause. Finally, the DTA contains an administrative assistance clause in accordance with the current international standard for the exchange of information upon request.
The cantons and the business circles concerned have welcomed the conclusion of the new agreement. In order to enter into force, it has to be approved by Parliament in Switzerland.
So far, Switzerland has signed 58 DTAs that are in line with the international standard on the exchange of information; 51 of these are in force.