281/1996 Coll.
The COMMUNICATION FROM the
Ministry of Foreign Affairs
Change: 99/Coll.
Ministry of Foreign Affairs communicates the day 4. December 1995 was in
Prague signed an agreement between the Government of the United States, and the Swiss
Federal Council for the avoidance of double taxation with respect to taxes on income and
asset.
With the Treaty, its assent, Parliament of the Czech Republic and the President of the
the Republic has ratified it. The instruments of ratification were exchanged in Berne on
October 23, 1996.
The contract on the basis of its article 28, paragraph 1. 2 entered into force on
October 23, 1996. That date were allowed to lapse in the relations between the Czech
Republic and the Swiss Confederation agreement between the Czechoslovak
Socialist Republic and the Swiss Confederation on mutual
exemption of aviation enterprises from taxation, negotiated an exchange of notes dated
April 26, 1960, under the famous # 8/1963.
The Czech version of the Treaty shall be designated at the same time. In the English version of the Treaty,
for its interpretation of the applicable, can be consulted at the Ministry of
Foreign Affairs and the Ministry of finance.
CONTRACT
between the Government of the Czech Republic and the Swiss Federal Council for the avoidance of
of double taxation with respect to taxes on income and on capital
The Government of the Czech Republic and the Swiss Federal Council,
Desiring to conclude an agreement on avoidance of double taxation with respect to taxes of
income and on capital,
have agreed as follows:
Article 1
The person to which the contract relates
This agreement shall apply to persons who are resident or established in
one or both of the Contracting States (residents).
Article 2
The tax, to which the contract relates
1. this Agreement shall apply to taxes on income and on capital imposed by the
on behalf of each Contracting State or of its lower administrative departments
or local authorities, irrespective of the method of selecting any.
2. taxes on income and on capital all taxes shall be levied on
the total income of all assets or parts of income or assets,
including taxes on profits from the alienation of movable or immovable property, taxes
of the total volume of wages or salaries paid by enterprises as well as taxes on
the increment property.
3. Current taxes, to which the contract relates, in particular:
and) in the Czech Republic:
(i) the tax on income of individuals;
(ii) the tax on income of legal persons;
(iii) tax on immovable property;
(hereinafter referred to as "Czech tax");
(b)) in Switzerland: Federal, cantonal and municipal taxes
(i) on income (total income, income from earnings, income from capital,
industrial and commercial profits, capital gains and other parts of the
income);
(ii) from the assets (total assets, movable and immovable property,
business assets, property settlements and reserves, and other parts of the
assets);
(hereinafter referred to as "Swiss tax").
4. this Agreement shall also apply to any identical or in
substantially similar taxes which are imposed after the date of signature of this agreement,
In addition to or instead of the current taxes. The competent authorities of the Contracting States
shall communicate the essential changes that will be made in their
the relevant tax laws.
5. this Treaty shall not be subject to a tax levied by deduction at source of
winnings in the lottery.
Article 3
General definitions
1. for the purposes of this agreement, unless the context requires a different interpretation:
and) the terms "a Contracting State" and "the other Contracting State" mean respectively according to the
the context of the Czech Republic or Switzerland;
(b)) the term "person" includes an individual, a company and any other
an Association of persons;
(c)) the term "company" refers to any legal entity or
the rightholder, considered for the purposes of taxation under the legal person;
(d)) the terms "enterprise of a Contracting State" and "enterprise of the other Contracting
State "means the enterprise carried on by a resident of a Contracting State, and
Enterprise carried on by a resident of the other Contracting State;
(e)) the term "national" means:
(i) any natural person who holds the citizenship of one of the
Contracting State;
(ii) any legal person, partnership and Association set up by the
According to the law in force in a Contracting State;
f) the term "international traffic" means any transport by ship, boat
or an aircraft which is operated by an undertaking whose place of effective
the management is located in a Contracting State, except when the right
ship, boat or aircraft is carried out only between points in the second
Contracting State;
(g)) the term "competent authority" means:
(i) in the case of the Czech Republic the Minister of finance or his authorized
representative;
(ii) in the case of Switzerland, the Director of the federal tax authority or its
authorized representative.
2. for the application of this agreement by a Contracting State, each expression
that it is not defined, of such importance that it has under the law of
This State, which regulates the taxes covered by this agreement,
unless the context requires a different interpretation.
Article 4
A resident of the
1. the term "resident of a Contracting State" means for the purposes of this agreement,
any person who is under the legislation of that State, subject to the
that State taxation because of their place of residence, permanent residence, place of
effective centre of management or any other similar criteria and also
This includes State and any lower administrative department or local Office
of that State. However, this term does not include any person who is
subject to taxation in this State solely because of the income from sources in this
State or property that is located there.
2. If the individual is under the provisions of paragraph 1, a resident in the
both of the Contracting States, the position of the specified as follows:
and) it is assumed that this person is a resident of the State in which the
a permanent home available; If he has a permanent home available in both
States, it is assumed to be a resident only of the State with which the
has strong personal and economic relations (Centre of vital interests);
(b)) if it cannot be determined which state the person Center
their vital interests, or if it does not have a permanent home in
any State, it is assumed to be a resident only of the State in
which usually resides;
(c)) If this person usually resides in both States, or in any
of them, it is assumed to be a resident only of the State of which he is
is a national;
d) if that person is a national of both States or of any
of them, the competent authorities of the Contracting States shall adjust the question by mutual
by the agreement.
3. If a person other than a person under the provisions of paragraph
1 a resident of both Contracting States, it is assumed to be a resident
only of the State in which the place of effective management.
Article 5
Permanent establishment
1. For the purposes of this agreement, the term "permanent establishment" means a permanent
device for business, through which the undertaking carries out completely
or part of their activities.
2. the term "permanent establishment" includes especially:
and instead of keeping);
(b)) race;
(c));
(d) a factory;)
e) a workshop; and
f) mine, the site of diesel or gas, a quarry or any other place where
the benefits of natural resources.
3. A building site, a construction, Assembly or installation project or supervision with
This creates a permanent establishment but only if such
Habitat, such project or supervision lasts more than twelve months.
4. Notwithstanding the preceding provisions of this article, it is assumed
the term "permanent establishment" shall not include:
and) device that is used only for storage, display or delivery
goods belonging to the enterprise;
(b)) the supply of goods belonging to the enterprise solely for the purpose
storage, display or delivery;
(c)) the supply of goods belonging to the enterprise solely for the purpose
the processing of another undertaking;
d) durable equipment for the business, which is solely for the purpose
purchase of goods, or collecting information for the enterprise;
e) durable equipment for the business, which is solely for the purpose
carrying out any other activity that has for undertaking the preparatory or
auxiliary character;
f) permanent device for business, solely for the performance of
any concentration of activities referred to in subparagraphs) to (e)), if
the total activity of durable equipment, resulting from this concentration has
a preparatory or auxiliary character.
5. If, notwithstanding the provisions of paragraphs 1 and 2, a person--other than
an independent representative, to whom paragraph 6 applies--acting in
a Contracting State on behalf of the company and has available and usually uses the full
the power to enter into contracts on behalf of the company, it is considered that this place has
a permanent establishment in that State in respect of all the activities that this
a person performs for the enterprise if the activities of such person are not limited to
the activities listed in paragraph 4 which, if they were carried out
through continuous device for business, would be done from this
durable equipment for business a permanent establishment under the provisions of
This paragraph.
6. Not considered that the enterprise has a permanent establishment in a Contracting State
just because in this State, carries on business through a
a broker, General Commission agent or any other agent of an independent,
If these persons are acting within their proper operation.
7. the fact that a company which is resident in a Contracting
State, controlled by the company or is controlled by a company which is
a resident of the other Contracting State, or which carries on business in the
that other State (whether through a permanent establishment or otherwise),
does not make itself from any of the company's permanent establishment
the other company.
Article 6
Income from immovable property
1. Income derived by a resident of a Contracting State from immovable
property (including income from agriculture or forestry) situated in the second
a Contracting State may be taxed in that other State.
2. the term "immovable property" has such importance under the laws
the Contracting State in which such property is located. The term includes in
any case, accessories of immovable property, the living and the dead inventory
used in agriculture and forestry, rights to which the provisions of the
civil law relating to property, the right to the enjoyment of immovable property
property and rights to variable or fixed payments for mining or
consent to the mining of mineral deposits, sources and other natural
resources; ships, boats and aircraft shall not be regarded as immovable property.
3. The provisions of paragraph 1 shall apply to income derived from the direct use,
hire or any other manner of use of immovable property.
4. The provisions of paragraphs 1 and 3 shall also apply to the income from immovable property
the assets of the company and to income from immovable property used for the performance of
an independent profession.
Article 7
The profits of enterprises
1. The profits of an enterprise of a Contracting State shall be taxable only in that
State if the undertaking does not pursue its activities in the other Contracting State
through a permanent establishment that is located there. If
the enterprise carries on business in this way, the profits of the enterprise may be
taxed in that other State, but only to the extent that it is
can be attributed to that permanent establishment.
2. If an enterprise of a Contracting State, carries on business in the
the other Contracting State through a permanent establishment that is there
placed, attach, subject to the provisions of paragraph 3 in any
Contracting State of such permanent establishment profits which could
so if it were a separate enterprise carried out the same or
similar activities under the same or similar conditions and was completely
independent contact with the enterprise of which it is a permanent establishment.
3. when calculating the profits of a permanent establishment shall be allowed to deduct the costs of
undertaking, incurred for the purposes of the permanent establishment including Executive
and general administrative expenses, whether incurred in this way in the State
in which the permanent establishment is situated or elsewhere.
4. If a Contracting State determine the gains that
to be attributed to a permanent establishment on the basis of allocation of the total
the profits of the enterprise to its various parts, nothing in paragraph 2 shall not preclude the
This Contracting State the profits to be taxed by the usual
the Division; the method used for distribution of profits must, however, be such that the
the result was in accordance with the principles laid down in this article.
5. A permanent establishment nepřičtou no gains on the ground that only
goods for the company.
6. For the purposes of the preceding paragraphs, the profits to be attributed to the
a permanent establishment set out each year in the same way, if the
There is valid and sufficient reason for a different procedure.
7. where profits include the part of the income which are dealt with separately
in the other articles of this agreement, the provisions of those articles shall not affect the
the provisions of this article.
Article 8
Shipping and air transport
1. Profits from the operation of ships, boats or aircraft in international traffic
shall be taxable only in the Contracting State in which the registered office is located
effective management of the enterprise.
2. when the effective centre of management of shipping is on board
a ship or boat, it is considered located in the Contracting State in which the
is the home port of the ship or boat, or, if no such
the home port, in the Contracting State in which the operator of a ship or
the boat is a resident.
3. The provisions of paragraph 1 shall also apply to profits from the participation in a pool,
the joint operation or an international operating organization.
Article 9
Associated enterprises
1. If the
and the company) of a Contracting State participates directly or indirectly in the
management, control or capital of an undertaking of the other Contracting State, or
(b)) the same persons participate directly or indirectly in the management, control or
the assets of the enterprise of a Contracting State and enterprise of the other Contracting
State,
and if in these cases are agreed between the two companies
or stored such conditions in their commercial or financial
relations which differ from those which would have been agreed upon between the
companies independent, can any profits that, were it not for these
the conditions would have been accrued to one of the enterprises, but due to these
conditions were not achieved, be included in the profits of this business and
subsequently taxed.
2. If the profits on which the company was a Contracting State taxed
in this State, are also included in the profits of the other Contracting
State and then taxed and profits are thus included gains that would
have been accrued to that enterprise of the other State, if the terms and conditions agreed
among the companies were for what would have been agreed between independent
companies, the competent authorities of the Contracting States shall exchange advice for
the purpose of reaching agreement on the adjustment of the amount of tax imposed on profits in both
of the Contracting States.
Article 10
Dividends
1. dividends paid by a company which is a resident of a
of a Contracting State to a resident of the other Contracting State, may be taxed in the
that other State.
2. However, such dividends may also be taxed in the Contracting State,
of which the company paying the dividends is a resident and according to the laws
laws of that State, but if the beneficial owner of the dividends is
a resident of the other Contracting State, the tax so determined shall not exceed 15
per cent of the gross amount of the dividends.
3. the Contracting State of which the company paying the dividends is a resident,
exempt without regard to the provisions of paragraph 2, dividends from taxation
paid by the company, if the beneficial owner of the dividends is:
and) the company (other than a partnership) that is a resident of the other
of a Contracting State and which holds directly at least 10 per cent of the capital
a company that pays dividends, if such participation is owned by
for a continuous period of at least one year; or
(b)) a pension fund or other similar institution providing pension
plans on which natural persons can participate in order to ensure
old-age, invalidity or survivors ' benefits, if
such a pension fund or other similar institution of a resident of the other
Contracting State is based or founded and is subject to supervision in accordance with the
the law of that other State and the pension plan is recognized for
tax purposes in accordance with the law of that other State; or
(c)), the Central Bank of the other State.
4. paragraphs 2 and 3 shall not affect the taxation of the profits of the company, all of which are
dividends are paid.
5. the term "dividends" as used in this article means income from shares
or other rights, with the exception of receivables, with a share of the profits, as well as
other revenues, which are subjected to the same tax regime as income
of the shares under the laws of the State of which the company
payment by a resident.
6. The provisions of paragraphs 1, 2 and 3 shall not apply if the beneficial
owner of the dividends, being a resident of a Contracting State,
carries on in the other Contracting State of which he is a resident company
paying the dividends, its activities through a permanent establishment,
that is placed there, or performs in that other State independent
the profession of a permanent base located there, and if the participation, for which
the dividends are paid is effectively connected to such permanent establishment or
a permanent base. In such a case, the provisions of article 7, or
Article 14 depending on what matters.
7. Where a company which is a resident of a Contracting State,
achieves profits or income from the other Contracting State, that
the second State to tax dividends paid by the company, except where such
dividends are paid to a resident of that other State or that participation, for
which the dividends are paid is effectively binds to a permanent establishment
or a permanent base, which is located in that other State, nor
subject to the company's retained profits tax on retained earnings
the company, even if the dividends paid or the undistributed profits
consists wholly or partly of profits or income with a source in the
that other State.
Article 11
Interest
1. interest arising in a Contracting State and paid to a resident of the
of the other Contracting State shall be taxable only in that other State,
If the resident is the beneficial owner of the interest.
2. The term "interest" as used in this article means income from debt-claims
any kind, secured and not secured the right to
real estate or supplement about participation in the debtor's profits, and in particular
income from government securities and income from bonds or debentures,
including bonuses and prizes associated with these securities, the bond market
or bonds. Penalty charges for late payment shall not be deemed interest
for the purposes of this article. The term "interest" shall not include any part of the income,
that is considered to be a dividend under the provisions of article 10, paragraph 5.
3. The provisions of paragraph 1 shall not apply if the beneficial owner
interest, which is resident in a Contracting State, carries on business in the other
the Contracting State in which the interest source, industrial or commercial
activity through a permanent establishment situated therein, or
performs in that other State independent of the profession through a permanent
the base located there, and if the claim from which the interest
paid, it is actually tied to such permanent establishment or fixed base.
In such a case, the provisions of article 7 or article 14, as
of this, about what matters.
4. It is assumed that interest to arise in a Contracting State when the
the payer is a resident of that State. However, if the payer of interest, whether
or is not a resident of a Contracting State, has in a Contracting State
a permanent establishment or a fixed base in connection with which there has been a
debt, from which interest paid, and such interest shall be charged to such
permanent establishment or fixed base, it is assumed that such interest
to arise in the State in which the permanent establishment or a permanent
the base is located.
5. If the amount of interest that are applicable to the claim from which they are
paid exceeds the due to the special relationship between the
the payer and the beneficial owner of the interest or between both of them and some
other person, the amount which would have been had given the real payer
owner, if it wasn't for such a relationship, the provisions of this
article just on this latter amount. The amount of the salaries that it
exceeds, in this case, will be taxed in accordance with the legislation of each
a Contracting State with regard to the other provisions of this Treaty.
Article 12
License fees
1. Royalties arising in a Contracting State paid to
a resident of the other Contracting State may be taxed in that other
State.
2. However, Such royalties may also be taxed in the Contracting
State in which it is their source, and in accordance with the legislation of
of that State, but if the beneficial owner of the royalties is
a resident of the other Contracting State, the tax so determined shall not exceed 10
per cent of the gross amount of the royalties.
3. the term "royalties" as used in this article means payments
of any kind received as a consideration for the use of, or the right to use
any copyright for literary, artistic or
scientific including cinematograph films, any patent,
trade mark, design or model, plan, secret formula or
the manufacturing process, or for the use of, or the right to use industrial,
commercial or scientific equipment, or for information that is subject to the
the experience acquired in the field of industrial, commercial or scientific.
4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of
of the royalties, being a resident in a Contracting State,
carries on in the other Contracting State in which the royalties
source, industrial or commercial activity through a fixed
the establishment, which is located there, or performs independent profession
through a permanent base located there, and if the right or
assets that give the emergence of royalty actually bind to
such permanent establishment or fixed base. In this case, shall apply
the provisions of article 7 or article 14, depending on what matters.
5. It is assumed that the licence fees to arise in a Contracting State,
If the payer is a resident of that State. However, if the payer
the royalties, whether he is or is not a resident in a Contracting State, has
in a Contracting State a permanent establishment or a fixed base in connection with the
where the obligation to pay royalties, which are borne by the Permanent
the establishment or the fixed base, it is assumed that these license
fees are to arise in the Contracting State in which the permanent establishment is
or fixed base is situated.
6. If the amount of the license fees that are related to the use,
right or information for which they are paid, exceeds the due
the special relationship between the payer and the beneficial owner or
between both of them and some other person, the amount which would have been had given the
the payer is the beneficial owner, if it wasn't for such relationships, the
the provisions of this article to the latter amount.
The amount of the salaries that it exceeds, in this case will be taxed according to the
the legislation of each Contracting State, taking into account the other
the provisions of this agreement.
Article 13
Gains from the alienation of property
1. the Profits that accrue to a resident of a Contracting State from the alienation of
immovable property referred to in article 6 and situated in the other Contracting
the State, may be taxed in that other State.
2. Gains from the alienation of movable property forming part of the business property of a
a permanent establishment which an enterprise of a Contracting State in the other
Contracting State or of movable property belonging to the permanent base
by a resident of a Contracting State has in the other Contracting State to the
the performance of an independent profession, including such profits realised from
the alienation of such a permanent establishment (alone or together with the whole enterprise)
or such a permanent base, may be taxed in that other State.
3. Gains from the alienation of ships, boats or aircraft operated in
international traffic, or movable property, that serves the operation of these
ships, boats or aircraft shall be taxable only in the Contracting State in
where is located the effective centre of management.
4. Gains from the alienation of any property, other than that referred to in
paragraphs 1, 2 and 3, shall be taxable only in the Contracting State in which the
alienator is a resident.
Article 14
An independent profession
1. Income derived by a resident of a Contracting State receives from the free
the profession or other activities of an independent character, shall be subject to taxation
only in that State unless it has a fixed base regularly available in the
the other Contracting State for the purpose of conducting its activities. If you want the
such a fixed base, the income may be taxed in the other State,
but only to the extent that is attributable to that fixed base.
2. The expression "liberal profession" includes especially independent activity
scientific, literary, artistic, educational or teaching, as well as
separate the activities of physicians, lawyers, engineers, architects, dentists and
accounting experts.
Article 15
Employment
1. a salaries, wages and other similar remuneration derived by a resident of a Contracting
the State is receiving due to employment, shall, subject to the provisions of
articles 16, 18 and 19 of the taxable only in that State unless the employment is not
exercised in the other Contracting State. If there is a job to be exercised,
Rewards can be received for them taxed in that other State.
2. remuneration which a resident of a Contracting State is receiving because of the
employment exercised in the other Contracting State, shall be subject to whatever
the provisions of paragraph 1, taxable only in the first-mentioned State, if:
and the recipient is resident in) other State for a period or multiple periods
shall not exceed in the aggregate 183 days in the calendar year, and
(b)) the rewards are paid by the employer or by the employer, that
is not a resident of the other State, and
(c) the remuneration is not borne by) a permanent establishment or a fixed base, which has
employer in the other State.
3. Notwithstanding the preceding provisions of this article may be rewards
received because of employment exercised aboard a ship or boat
the aircraft operated in international traffic are taxed in a Contracting State,
in which is located the effective centre of management.
Article 16
Royalties
Directors ' fees and other similar payments to a resident of a Contracting State
he receives as a member of the management board or other similar body of a company,
which is resident in the other Contracting State, may be taxed in that
the second State.
Article 17
Artists and athletes
1. Income derived by a resident of a Contracting State as to the public
entertainer, such as a theatre, film, radio or television
an artist or a musician, or as an athlete of such personally
activities in the other Contracting State, may be, regardless of the
the provisions of articles 14 and 15 of the taxed in that other State.
2. If the income from the activities carried out by the artist in person or
athlete accrues not to that artist or athlete himself, but other
the person may be those revenues regardless of the provisions of articles 7, 14 and 15
taxed in the Contracting State in which an artist or an athlete performs
their activity.
3. The provisions of paragraphs 1 and 2 shall not apply to income from activities
carried out in a single artist or sportsman of the msmluvním State, which is
a resident of the other Contracting State, if the first-mentioned State
performances entirely or mainly financed out of public funds of the other
Contracting State or its lower administrative department or local authority.
In this case, is subject to income tax only in the other Contracting State.
Article 18
Board
Pensions and other similar salaries paid by reason of past employment
a resident of a Contracting State shall, subject to the provisions of
Article 19, paragraph 2. 2 taxation only in that State.
Article 19
Public function
1.
a) salaries, wages and other similar remuneration, other than a pension paid by one
Contracting State, a political subdivision or a local authority
the physical person for services rendered to that State, administrative body or
the authority shall be taxable only in that State.
(b)) The salaries, wages and other similar remuneration shall be taxable only, however,
in the other Contracting State if the services are rendered in that State
and an individual who is a resident of this State:
(i) is a national of that State; or
(ii) did not become a resident of that State solely for the purpose of providing
services.
2.
and Any pensions paid), either directly or from the funds, which has set up a
a Contracting State, its lower administrative department or local authority,
the physical person for services rendered to that State, its lower
the administrative subdivision or authority shall be taxable only in that State.
(b) However, Such pension) are subject to taxation only in the other Contracting State,
If the individual is a resident of, and a national of that
State.
3. the provisions of articles 15, 16 and 18 shall apply to salaries, wages and other
similar remuneration and pensions for services rendered in connection with the industrial
or business activities carried out by one of the Contracting States,
a political subdivision or a local authority.
Article 20
Students
1. the salaries that a student or an apprentice who is or was immediately before the
his arrival in a Contracting State a resident of the other Contracting
State and who is present in the first-mentioned State solely for the purpose of study
or training, to cover the costs of nutrition, study or training,
will not be taxed in that State provided that such salaries result
from sources outside that State.
2. as regards the study aid, scholarships and remuneration from employment, to
that are not covered by paragraph 1, it will have a student or apprentice referred to in
paragraph 1 in the course of study or training, entitled to the same exemptions, reliefs
or reduction of taxes, what belongs to residents of the State in which he resides.
Article 21
Other income
1. the income of a resident of a Contracting State, wherever,
which is not dealt with in the foregoing articles of this Convention shall be subject to
tax only in that State.
2. The provisions of paragraph 1 shall not apply to income, other than income from
immovable property, which is defined in article 6 (1). 2 If the
the recipient of such income, being a resident in a Contracting State,
industrial or commercial activity exercised in the other Contracting State
through a permanent establishment located there or exercises in this
other State independent of the profession from a permanent base located there and
If the right or property in respect of which the income is paid, are actually
connected with such permanent establishment or fixed base. In such a
If the provisions of article 7 or article 14, depending on
What matters.
Article 22
Property
1. Capital represented by immovable property referred to in article 6, which
own a resident of a Contracting State and which is located on the second
a Contracting State may be taxed in that other State.
2. Capital represented by movable property that is part of the business
the property of a permanent establishment which an enterprise of a Contracting State in the
the other Contracting State or of movable property belonging to the Permanent
the base, which is a resident of a Contracting State in the other Contracting
State to exercise an independent profession, may be taxed in that other
State.
3. Capital represented by ships, boats and aircraft, which are operated
in international traffic and movable property serving for the operation
such ships, boats and aircraft shall be subject to taxation only in a Contracting
State in which is located the actual management of the undertaking.
4. All other elements of the property of a resident of a Contracting State
shall be taxable only in that State.
Article 23
Elimination of double taxation
1. in the case of a resident of the United States double taxation will be avoided
as follows:
and Czech Republic) may, when depositing taxes its residents included in the
the tax base from which such a tax imposed under the revenue or
assets that may be in accordance with the provisions of this agreement, also
taxed in Switzerland, however, allows to reduce the amount of tax calculated from the
such a base an amount equal to the tax paid in Switzerland.
The amount of the tax is to be reduced, however, shall not exceed that part of the Czech taxes
calculated before the reduction, that fairly falls on income or
assets that may be in accordance with the provisions of this agreement, taxed
Switzerland.
b) if subject to in accordance with any provision of the contract income
received or property owned by a resident of the United States taxation
only in Switzerland, the Czech Republic cut such income or property of the
taxation, but may, in calculating the amount of tax on the remaining income or
the remaining assets of this resident, take into account the cut income or
asset.
(c)) the exemption Method may also be, notwithstanding the provisions of subparagraph (a))
This paragraph, in the Czech Republic used, provided that the
it permitted by its national laws, and that is with them in the
line.
2. in the case of Switzerland double taxation will be avoided as follows:
and If a resident of Switzerland) derives income or owns property,
that may be, in accordance with the provisions of this agreement, taxed in the United
Republic, Switzerland, subject to the provisions of (b)), such
income or assets from taxation, but may, in calculating tax on
the remaining income or property of such resident, remaining use
the rate of tax which would have been used if the cut income or assets
not in this way.
(b) Where a resident of Switzerland) is in receipt of dividends or royalties,
which, in accordance with the provisions of article 10, or 12, may be taxed in the
The Czech Republic, Switzerland shall allow, upon request, on this relief
a resident of. The relief may consist of:
(i) a deduction from the tax on income of that resident an amount equal to the tax
stored in the Czech Republic in accordance with the provisions of article 10 or 12;
such deduction shall not exceed that part of the Swiss tax calculated before
such deduction, which is appropriate to the income which may be taxed in the
The Czech Republic; or
(ii) the flat-rate reduction of the Swiss tax specified standard forms,
subject to the General principles of the relief, which is
point (i); or
(iii) a partial exemption of such dividends or royalties from
the Swiss tax, in any case consisting at least of the deduction
stored in the Czech Republic from the gross amount of the dividends or licence
fees.
c) a company which is a resident of Switzerland, and who receives dividends
from a company that is a resident of the United States, for the purposes of
taxation in Switzerland in terms of such dividends, entitled to the same
the relief would have been granted to companies if company paying
the dividend was a resident of Switzerland.
Switzerland shall determine the applicable relief and shall determine the procedure in accordance with the
Swiss provisions that relate to the implementation of the international
agreements of the Swiss Confederation for the avoidance of double taxation.
Article 24
Prohibition of discrimination
1. nationals of a Contracting State shall not be subjected in the
the other Contracting State to any taxation or duties associated with him,
which is other or more burdensome than the taxation and connected requirements
which are or may be subjected by nationals of this second
State who are in the same situation. This provision shall, notwithstanding the
the provisions of article 1, also apply to persons who are not residents
one or both of the Contracting States.
2. the taxation on a permanent establishment which an enterprise of a Contracting State in the
the other Contracting State, or a permanent base, available
a resident of a Contracting State in the other Contracting State, not in the
that other State than the taxation of undertakings or divided residents
This other State, or who perform the same activity. This
the provisions shall not be construed as an obligation of a Contracting State to
He admitted to residents of the other Contracting State personal credits, discounts and
the tax reduction because of the status or family obligations, which
It grants to its own residents.
3. If it is not to apply the provisions of article 9, paragraph 1. 1, article 11
paragraph. 5 or to article 12 para. 6, interest, royalties and other
expenses paid by the enterprise of a Contracting State to a resident of the other
Contracting State deductible for purposes of determining taxable profits
This undertaking under the same conditions as if they had been paid to a resident of the
the first-mentioned State. Similarly, any debts of an enterprise of a
of a Contracting State to a resident of the other Contracting State for the purposes of
the determination of the taxable assets of such an undertaking, under the same
conditions, as if they had been contracted to a resident of the first-mentioned
State.
4. enterprises of a Contracting State, the capital of which is wholly or partly,
directly or indirectly owned or controlled by one or more
residents of the other Contracting State, shall not be subjected in the first-mentioned
Contracting State to any taxation or duties associated with him that
is other or more burdensome than the taxation and connected requirements to which
are or may be subjected to other similar businesses of former
State.
5. the provisions of this article shall, notwithstanding the provisions of article 2 of
apply to taxes of every kind and name.
6. The contributions to the pension plan, which is based, and for tax purposes
recognized in one Contracting State, paid by a natural person or
the name of the natural person who nvykonává employment in the other Contracting
State shall be, for the purposes of determining the tax payable by a natural person and profits
the company, which may be taxed in that State, in this State and usage
in the same manner and subject to the same conditions and restrictions as
contributions paid to the pension plan, which is for tax purposes
recognized in that State, provided that:
and) immediately before she began working in that State, physical
the person was not a resident of this State and the pension plan will no longer
participated in and
(b)) the pension plan is accepted by the competent authority of that State as generally
the corresponding pension scheme recognised for tax purposes by that State.
7. For the purposes of paragraph 6:
a), the expression "pension plan" means a plan, on which the natural person
participate in order to provide old-age and
(b)) the pension plan is in the State recognized for tax purposes, if
contributions to the plan in this State are eligible for tax deduction.
Article 25
Resolving cases by agreement
1. where a person considers that the actions of one or both of the Contracting
States lead or lead it to taxation not in accordance with the
the provisions of this agreement, he may, irrespective of the remedies
that provides the national law of those States, present your case
the competent authority of the Contracting State of which he is a resident or, if the
his case comes under paragraph 1 of article 24. 1, the Office of the Contracting State
of which he is a national. The case must be presented within three years from the
the first notification of the action which gives rise to taxation not in accordance with the
the provisions of this agreement.
2. the competent authority will try to, if an objection will be considered for
justified and if it is not itself able to find a satisfactory solution to the case
decided by mutual agreement with the competent authority of the other Contracting State
so, in order to avoid taxation which is not in conformity with this agreement.
3. the competent authorities of the Contracting States shall endeavour to resolve by mutual
the agreement difficulties or concerns that may arise in the interpretation or
the application of this agreement. They may also consult in order to avoid
double taxation in cases not covered by the contract.
4. the competent authorities of the Contracting States may come in direct contact with a view to
reaching an agreement in the sense of the preceding paragraphs. If oral
Exchange of views appears to be effective for the achievement of the agreement, can such exchange
opinions to take place through the Commission, composed of representatives of
the competent authorities of the Contracting States.
Article 26
The exchange of information
1. the competent authorities of the Contracting States shall exchange such information,
for which it can be assumed that they are relevant to the implementation of the
the provisions of this contract or in relation to the implementation or enforcement of the
the national laws that apply to taxes of every kind
and naming the stored on behalf of the Contracting States or of their lower
subdivisions or local authorities, if the taxation thereunder
It is not in breach of contract. Exchange of information is not restricted by articles 1 and 2.
2. any information received by a Contracting State under paragraph 1 shall be
kept a secret in the same manner as information obtained under the
national law of that State and shall be made available only to
to persons or authorities (including courts and administrative authorities), which deal with
charge of the assessment or collection of taxes, which are listed in paragraph 1,
enforcement or prosecution relating to such taxes, or making decisions
on appeals in respect of those taxes. Such persons or authorities
This information shall be used only for such purposes. They may disclose the information
in public court proceedings or in judicial decisions. Information
a Contracting State may be received regardless of the above used
for other purposes, if such information may be used for such
other purposes under the laws of both States, and if the competent authority
State information gives its consent to such use.
3. The provisions of paragraphs 1 and 2 shall not be in any way interpreted as
store the Contracting State the obligation:
and perform administrative measures) that would infringe on the laws and
the administrative practice of that or of the other Contracting State;
(b)) to provide information that cannot be obtained on the basis of the legal
regulations or in the normal course of administrative proceedings of this or of the other Contracting
State;
c) to supply information which would disclose any trade,
economic, industrial, commercial or professional secret or of a commercial
procedure, or information, the disclosure of which would be contrary to the public
policy.
4. where, in accordance with this article in one Contracting State
required information, the other Contracting State shall use its measures
aimed at obtaining information, in order to obtain the information, even if this
the other State does not need such information for its own tax purposes.
The obligation contained in the preceding sentence is subject to the limitations of paragraph 3 but in
no case these restrictions will not be interpreted so as to allow the
Contracting State to refuse to provide information only on the grounds that the
It does not have domestic interest in such information.
5. The provisions of paragraph 3 shall not be in any way interpreted as
allow the Contracting Government refuse to provide information only
the reason that the information has a Bank, other financial institution,
trustee or person acting on behalf of or as agent,
or because the information is relevant to the ownership shares of the person.
If it is necessary in order to meet the obligations of the requested State
under this paragraph, to the tax authorities of that Contracting State for
to obtain such information, the power to enforce the provision
the information that is the subject of this paragraph, and regardless of the
paragraph 3, or any of the provisions of national law
legislation of that State, that provides otherwise.
Article 27
Diplomats and consular officials
1. Nothing in this Agreement shall affect the fiscal privileges of members of diplomatic
missions or consular officials under the General rules of international
law or under the provisions of special agreements.
2. Notwithstanding the provisions of article 4 shall be the natural person who is
a member of the diplomatic mission or consular post of a Contracting
the State that is located in the other Contracting State or in a third State,
considered for the purposes of this agreement, a resident of the sending State,
If:
and shall not be subject, in accordance) with international law, in the receiving State
taxation of income from sources outside that State or on capital situated
outside that State, and
(b) in the posting State) is subject to the same tax obligations of its
of the total income or on capital as are residents of that State.
3. the agreement shall not apply to international organizations, its agencies or
officials or to persons who are members of a diplomatic mission or
consular post of a third country present in one Contracting State and
No-they are judged in one or in the other Contracting State as
residents in respect of taxes on income or on capital.
Article 28
Entry into force
1. this Treaty is subject to ratification and the instruments of ratification shall be exchanged
in Bern, Switzerland as soon as possible.
2. the contract shall enter into force by the exchange of instruments of ratification and its
the provisions will be carried out,
and) with regard to taxes withheld at source, on amounts paid or
are credited to the first day, or later the second month following the
the date on which the contract enters into force.
(b)) in respect of other taxes, for taxation years beginning on the first day
or after the first day of January of the year in which the Agreement enters into force.
3. the provisions of diplomatic notes exchanged 26. April 1960 between
Czechoslovakia and the Swiss Confederation for the avoidance of double taxation
companies engaged in air transportation between the Czech
Republic and Switzerland shall cease to apply from the date on which they begin to
apply the provisions of this agreement.
Article 29
Notice of termination
This agreement shall remain in force until denounced by one
Contracting State. Any Contracting State may withdraw from the Contract in writing
through diplomatic channels, at least six months before the end of each
of the calendar year. In this case the Treaty cease to apply:
and) with regard to taxes withheld at source, on amounts paid or
attributed to a 1. January or later in the calendar year following the
year in which the notice of termination has been given;
(b)) in respect of other taxes, for taxation years beginning 1. January or
later in the calendar year following the year in which it was given
notice of termination.
In witness whereof, the duly authorised thereto, have signed this agreement.
Given in duplicate in Prague on 4 April 2006. December 1995 in Czech,
German and English languages, all the texts are authentic. In
the event of any differences of interpretation between the Czech and German text
the English text will be decisive.
For the Government of the United States:
Ing. Ivan Kočárník, CSc. v. r.
Deputy Prime Minister and Minister of finance
The Swiss Federal Council:
Sylvia Pauli in r.
Ambassador
Protocol
The Government of the Czech Republic and the Swiss Federal Council agreed in Prague on
on December 4, 1995, when the signing of the agreement between the two Governments on the
avoidance of double taxation with respect to taxes on income and on capital the
the following provisions, which shall form an integral part of the said
of the Treaty.
1. The provisions of article 4
Both States confirm that the legal person who is established in a Contracting
State in accordance with the laws of that State and that is, in General, in this
State shall be exempt from tax, for the purpose of this agreement is deemed
a resident of that Contracting State.
2. With respect to article 7
With regard to article 7 (2). 1 and 2, if the enterprise of a Contracting
State sells goods or carries on business in the other State
through a permanent establishment situated therein, the profits
This permanent establishment set out only on the basis of that part of the total
receipts for such sale, or an activity that is to be attributed to the actual
the activity of the permanent establishment.
If the enterprise has a permanent establishment in the case of contracts regarding
surveillance, delivery, installation or construction of industrial, commercial or
scientific equipment or buildings or public works, the profits of such permanent
the establishment will not be established on the basis of the total width of the contract, but
shall be determined only on the basis of that part of the contract that is in fact
exercised by a permanent establishment in the State where the permanent establishment
located.
The profits related to that part of the contract, which is exercised by Headquarters
the Enterprise shall be taxable only in the State of which the enterprise is a resident.
3. With respect to article 10
and if, at the moment) dividend payouts was not met minimum period
participation laid down in article 10, paragraph 3 (a)), and for this reason was
at the moment of payment charged to the tax provided for in article 10, paragraph 2,
beneficial owner of the dividends is entitled to refund of taxes withheld, if
the condition is the minimum period of participation met subsequently.
(b)) for the purposes of article 10, paragraph 3, subparagraph (b)) means that the pension
a plan that is recognized for tax purposes if
(i) contributions paid by the participant to the pension plan are in this State
under the legislation of that Member State wholly or partially deductible from
the taxable income of the participant; or
(ii) the full amount of the contributions paid by the employer is not in this State
According to the laws of that State, be included in taxable income
of the participant.
It is further understood that the expression "Pension Fund, or other similar institution
providing pension plans recognized for tax purposes "also includes
any investment fund, Foundation, or other institution to which or
that invest exclusively in such pension funds or other
a similar institution providing such pension plans.
4. With respect to article 12
As regards paragraph 2, it is understood that if Switzerland does not choose in accordance with
their national legislation, tax at the source of the license
fees paid to non-residents, the provisions of paragraph 2 shall not apply, and
the tax provided for in the Contracting State in which the royalties
the source does not exceed 5 per cent of the gross amount of the royalties.
5. The provisions of articles 18 and 19
It is understood that article 18 and article 19 paragraph 2, depending on what
case, quantify the regular salaries, but also that the
include the salaries of the lump.
6. With respect to article 25
In the case of the Czech Republic, on the basis of the contract or the agreement on the
avoidance of double taxation concluded with a third country, after the date of signature of the
This Protocol shall agree the inclusion of arbitration provisions in such
contract or agreement, the competent authorities of the United States and Switzerland begins
as soon as possible negotiations to conclude an additional protocol with the
target Tween arbitration provisions in this agreement.
7. Article 26 of the
and) it is understood that the competent authority of the requesting State shall provide upon request
for information pursuant to article 26 to the competent authority of the requested State
the following information:
(i) the identity of the person, in which the inspection is carried out, or investigation;
(ii) the time period for which the information is required;
(iii) the specification of the required information, including the nature and
the form in which the requesting State wishes to receive the information from the requested
State;
(iv) the tax purpose for which the information is required;
(v) if he knows the name and address of any person that believes
that has the requested information;
(vi) a statement that the requesting State has made use of all the resources available in the
its own territory to obtain the information, except those that would
led to the formation of excessive difficulties.
(b)) it is understood that standard "expected of relevance" is intended to
to allow for Exchange of information in tax matters, in what
to the fullest extent possible, and at the same time, to make it clear that Contracting
States do not have the ability to engage in speculative matters,
that do not have an obvious link in relation to the ongoing review, or
investigation ("fishing expeditions"), or request information, which is
unlikely, that is relevant in relation to tax issues
of the taxpayer. In the moment when the letter a) contains important
the procedural requirements which are intended to ensure that it has been found that
the cases do not appear "fishing expeditions", subparagraph (i) to (vi) (a)
and) shall not be interpreted so that undermined the effective exchange of information.
(c)) it is understood that article 26 of the Treaty does not mandate the Contracting States
Exchange information automatically or spontaneously.
d) it is understood that in the case of the exchange of information shall remain applicable
administrative-procedural rules relating to the rights of taxpayers
provided for in the requested legal State. It is further understood that this provision
aims to ensure the taxpayer a fair procedure and not
prevent or delay the process of exchange of information.
8. for the purposes of the Treaty means that the competent authority of a Contracting
the State may, after consultation with the competent authority of the other Contracting State
deny to any person, or in respect of any transaction, the benefits
arising from this contract, if in his opinion the provision
These benefits mean the abuse of the Treaty.
Given in duplicate in Prague on 4 April 2006. December 1995 in Czech,
German and English languages, all the texts are authentic. In
the event of any differences of interpretation between the German and the Czech text
the English text will be decisive.
For the Government of the United States:
Ing. Ivan Kočárník, CSc. v. r.
Deputy Prime Minister and Minister of finance
The Swiss Federal Council:
Sylvia Pauli in r.
Ambassador
