The
Swiss
Government
has
recommended
that
parliament
approve
a
law
ratifying
the
new double
tax
agreement signed
with
Zimbabwe.
The
Federal
Council
adopted
a
dispatch
on
the
DTA
at
its
meeting
on
November
5,
2025.
The
cantons
and
relevant
business
associations
have
already
welcomed
the
conclusion
of
the
deal,
but
parliament
must
now
endorse
legislation
on
the
ratification
of
the
agreement
to
enable
it
to
enter
into
force.
The
agreement
provides
that
the
maximum
rate
of
withholding
tax
that
will
be
charged
on
dividends
income
at
source
will
be
capped
at
five
percent
where
the
recipient
holds
at
least
25
percent
of
the
capital
of
the
company
paying
the
dividends
for
a
period
of
365
days
including
the
dividend
payment
date.
Otherwise,
withholding
tax
will
be
capped
at
15
percent.
For
interest
and
royalties
income,
the
agreement
caps
withholding
tax
at
source
at
7.5
percent.
Finally,
for
technical
services
fees,
the
withholding
tax
rate
will
be
capped
at
2.5
percent.
The
agreement
includes
provisions
to
counter
tax
base
erosion
and
profit
shifting.
Specifically,
it
includes
a
preamble
that
states
that
the
DTA
is
not
intended
to
create
opportunities
for
non-taxation
or
reduced
taxation
through
tax
evasion
or
avoidance,
or
treaty
shopping.
Further,
the
agreement
includes
provisions
to
counter
treaty
abuse,
prevent
the
artificial
avoidance
of
permanent
establishment
status,
neutralize
the
effects
of
hybrid
mismatch
arrangements,
and
improve
dispute
resolution
mechanisms.
The
agreement
will
become
effective
after
the
completion
of
domestic
ratification
procedures
by
both
nations.
Post
published
in:
Business