Law On The Conclusion Of The Protocol Amending The Agreement Between Denmark And Switzerland For The Avoidance Of Double Taxation On Income And Property Taxes

Original Language Title: Lov om indgåelse af protokol om ændring af overenskomst mellem Danmark og Schweiz til undgåelse af dobbeltbeskatning vedrørende skatter af indkomst og formue

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Read the untranslated law here: https://www.retsinformation.dk/Forms/R0710.aspx?id=128607

Overview (table of contents) Annex 1 The full text of the Law on the conclusion of the Protocol amending the agreement between Denmark and Switzerland for the avoidance of double taxation on income and property taxes

WE, MARGRETHE the SECOND, by the grace of God Queen of Denmark, do indeed:

The Danish Parliament has adopted and we know Our consent confirmed the following law:

§ 1. Protocol of 21. August 2009 between the Kingdom of Denmark and the Swiss Confederation amending the agreement for the avoidance of double taxation on income and capital taxes signed in Bern on 23. November 1973 as amended by the Protocol signed at Copenhagen on 11. March 1997 can be accepted on Denmark's behalf. Protocol is included as annex 1 to this Act.

(2). The Protocol enters into force and is applicable in Denmark in accordance with the provisions of article XI of the Protocol.

§ 2. The law shall enter into force on the 1. January 2010.

§ 3. The law does not apply to the Faroe Islands and Greenland.
Given at Amalienborg Palace, the 4. December 2009 Under Our Royal hand and Seal in the Queen's Name: FREDERIK, Crown Prince of Denmark/Kristian Jensen Annex 1

PROTOCOL

BETWEEN the KINGDOM OF DENMARK and the SWISS CONFEDERATION AMENDING the AGREEMENT for the AVOIDANCE of DOUBLE TAXATION on INCOME and PROPERTY TAXES, SIGNED in BERN on 23. NOVEMBER 1973, AS AMENDED by the PROTOCOL signed at COPENHAGEN on 11. MARCH 1997

The Kingdom Of Denmark

and

The Swiss Confederation,

who wants to conclude a protocol to amend the agreement between the Kingdom of Denmark and the Swiss Confederation for the avoidance of double taxation on income and property taxes, signed in Bern on 23. November 1973, as amended by the Protocol signed at Copenhagen on 11. March 1997 (hereinafter referred to as ' the agreement '),

have agreed upon the following:

ARTICLE IN

Under article 10 (Dividends) be repealed and replaced by the following article:

' Article 10

Yield

1. Dividends paid by a company which is domiciled in a Contracting State, to a person who is resident in the other Contracting State, may be taxed in that other State.

2. However, Such dividends may also be taxed in the Contracting State in which the company that payor, a resident, and according to the legislation of that State, but if the beneficial owner of the dividends is a resident of the other Contracting State, the tax levied shall not exceed 15 per cent of the gross amount of dividends.

3. Notwithstanding the provisions of paragraph 2, dividends paid by a company which is domiciled in a Contracting State, to a person who is resident in the other Contracting State, only be taxed in that other State if the beneficial owner is




(a)) a Corporation (other than a partnership), which directly owns at least 10 per cent of the capital of the company paying the dividend; or

(b)) a pension fund or other similar institution that offers retirement plans, in which individuals can participate, with the aim of securing old-age, invalidity or efterladtepensionsydelser, when this pension fund or other similar institution is created, fiscally recognized and controlled in accordance with the law of that other State.



The competent authorities of the Contracting States shall determine by mutual agreement the way in which these restrictions should apply.

This paragraph shall not affect access to tax the profits of the company, of which the dividend is paid.

4. The term "dividends" in this article means income from shares, "jouissance" shares or "jouissance" rights, founder shares or other rights, not being debt-claims, and which give a right to share in profits, as well as income from other corporate rights which is subject to the same taxation treatment as income from shares under the laws of the State of which the company making the distribution is a resident.

5. the provisions of paragraphs 1, 2 and 3 shall not apply if the beneficial owner of dividends, which is domiciled in a Contracting State operates the business activities in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein or carries on business in that other State free from a fixed location, and the located there shareholding, which are the basis for the disbursement of the proceeds , directly connected with such permanent establishment or fixed location. In that case, respectively, article 7 or article 14 apply.

6. Receive a company that is domiciled in a Contracting State, profits or income from the other Contracting State, that other State may not impose on any tax on the dividends paid by the company, unless the proceeds shall be paid to a person who is a resident of that other State, or unless the shareholding, which are the basis for the disbursement of the proceeds, directly connected with a permanent establishment or a fixed location situated in that other State, or make the company's non-distributed profits of a tax on the company's non-distributed profits, even if the dividends paid or the non-distributed profit consists wholly or partly of profits or income arising from that other State. '

ARTICLE II

1. Under article 11, paragraph 1, (interest) is repealed and replaced by the following paragraph:

» Interest generated from one of the Contracting States, and if the beneficial owner is resident in the other Contracting State, may be taxed in that other State only. '

2. Under article 11, paragraph 3, (interest) is repealed and replaced by the following paragraph:

' 3. The provisions of paragraph 1 shall not apply if the beneficial owner of interest rates, which is domiciled in a Contracting State operates the business activities in the other Contracting State in which the interest arises, through a permanent establishment situated therein or carries on business in that other State free from a fixed location, and the located there claim that lies at the root of the interest paid, directly connected with such permanent establishment or fixed location. In that case, respectively, article 7 or article 14 apply. '

ARTICLE III

1. Under article 12, paragraph 1, (royalties) be repealed and replaced by the following paragraph:

» Royalties arising from one of the Contracting States, and if the beneficial owner is resident in the other Contracting State, may be taxed in that other State only. '

2. Under article 12, paragraph 3, (royalties) be repealed and replaced by the following paragraph:

' 3. The provisions of paragraph 1 shall not apply if the beneficial owner, that is the amount of the royalty domiciled in a Contracting State operates the business activities in the other Contracting State in which the royalty amount arises, through a permanent establishment situated therein or carries on business in that other State free from a fixed location, and the located there right or property which are the basis for the paid royalties , directly connected with such permanent establishment or fixed location. In that case, respectively, article 7 or article 14 apply. '

ARTICLE IV

Under article 18 (pensions) be repealed and replaced by the following article:

' Article 18

Pensions

1. Pensions and other similar remuneration, as well as independent of the previous employment that derives from a Contracting State and paid to a person who is resident in the other Contracting State, may be taxed in the first-mentioned State if the contributions paid by the




(a)) the eligible for the pension scheme have been deducted in the recipient's taxable income in the first-mentioned Contracting State pursuant to the legislation of that State; or

(b)) an employer was not taxable income for legitimate in the first-mentioned Contracting State pursuant to the legislation of that State.



2. For the purposes of this article, includes the term ' pensions and other similar remuneration ' payments under the social security legislation in a Contracting State. '

ARTICLE V

1. The current wording of article 21 of the agreement (income not expressly mentioned) becomes paragraph 1.

2. The following paragraph 2 shall be inserted in this article:

' 2. the provisions of paragraph 1 shall not apply to income, other than income from immovable property as defined in article 6, paragraph 2, if the recipient of such income, which is domiciled in a Contracting State operates the business activities in the other Contracting State in which the income arises, through a permanent establishment situated therein or carries on business in that other State free from a fixed location located there , and the right or property in respect of which the income is paid, the directly connected with such permanent establishment or fixed location. In that case, respectively, article 7 or article 14 apply. '

ARTICLE VI

Under article 23, paragraph 2, (methods for elimination of double taxation) be repealed and replaced by the following paragraph:

' 2. In Switzerland must double taxation can be avoided as follows:











(a))






In cases where a person who is a resident of Switzerland, entitled income or owns property which, in accordance with the provisions of this agreement may be taxed in Denmark, Switzerland – unless the provisions of subparagraph (b) require otherwise exempt such income or wealth – from taxation, but may at which tax is calculated by the person's other income or assets using the tax rate that would have been used If the exempted income or property had not been exempted from taxation.







(b))





In cases where a person who is a resident of Switzerland, entitled to dividends in accordance with article 10, may be taxed in Denmark, Switzerland, on request, permit the person concerned a relaxation. The relief may consist of:





 



(i)





a deduction in that person's Swiss income tax on an amount equal to the tax that is applied in Denmark in accordance with article 10; such a deduction may not, however, exceed that part of the Swiss tax, as calculated before the deduction is given, which is attributable to the income which may be taxed in Denmark; or





 



(ii)





a reduced deduction against the Swiss tax; or





 



(iii)





a partial exemption of such dividends from Swiss tax, in all cases at least consisting of a reduction of the tax that is applied in Denmark, from the gross amount of dividends.





 



Switzerland determines the reduction applicable, and defines the procedure in accordance with the Swiss rules on the execution of the Swiss Confederation's international agreements for the avoidance of double taxation.







(c))





A company which is a resident of Switzerland, and which receives dividends from a company which is a resident of Denmark, has with respect to the Swiss tax on such dividends entitled to the same relief that would be procured the company, if the dividend paying company had been resident in Switzerland '.











ARTICLE VII

In article 25 (procedure for the conclusion of reciprocal agreements) shall be inserted as new paragraph 5:

' 5. Where




(a)) a person referred to in paragraph 1 has brought a case to the competent authority of a Contracting State on the ground that the actions taken by one or both of the Contracting States for the person has led to a taxation which is not in accordance with the terms of this agreement, and

(b)), the competent authorities are unable to reach an agreement to resolve the matter in accordance with paragraph 2 within three years from the referral of the matter to the competent authority of the other Contracting State,



should unresolved questions arise of the case, be subject to arbitration, if the person so requests. These unresolved issues should not, however, be subject to arbitration if a decision on these issues has already been taken by a court or an administrative complaint instance in one of the States. Unless a person who is directly affected by the matter, did not accept the reciprocal agreement, which implements the arbitration decision, the competent authority or authorities and the persons who are directly affected by the matter, agree on a different solution within six months after they have been informed of the decision, the arbitrator is binding on both States and shall be implemented without regard to the time-limits laid down in those States ' internal legislation. The competent authorities of the Contracting States shall by mutual agreement to decide the way in which this paragraph shall apply.

The Contracting States may at the Court of arbitration, established in accordance with the provisions of this paragraph shall release such information as is necessary for the implementation of the arbitration case. The members of the Court of arbitration is subject to the restrictions with respect to disclosure, as described in article 27, paragraph 2, with respect to the information, which is thus released. '

ARTICLE VIII

Article 27 (Exchange of information) be repealed and replaced by the following article:

' Article 27

The exchange of information

1. The competent authorities of the Contracting States shall exchange such information as is likely to be of importance for the implementation of the provisions of this agreement or to the administration or enforcement of the domestic law of the Contracting States concerning taxes covered by the agreement, in so far as this taxation is not contrary to the agreement. The exchange of information is not restricted by article 1.

2. Any information received under paragraph 1 by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State, and shall be granted only to persons or authorities (including courts and administrative authorities) involved in the equation, collecting, collection, enforcement or prosecution in respect of, or appeal decisions in relation to the taxes referred to in paragraph 1. Such persons or authorities shall use the information only for the purposes mentioned. They must notify the information under the public legal proceedings or in judicial decisions. Notwithstanding the foregoing, information received by a Contracting State must be used for other purposes when such information may be used for such other purposes according to the laws of both States, and the competent authority of the Member State which submitted the information, gives permission for such use.

3. the provisions of paragraphs 1 and 2 may in no case be interpreted as imposing an obligation on a State party:




1) to carry out administrative acts contrary to this or the other Contracting State legislation and administrative practice;

2) to supply information which is not obtainable under this or another Contracting State legislation or general administrative practice;

3) to supply information which would disclose any commercial, business, industrial, commercial or professional secret or method of production, or information whose disclosure would run counter to the public interest (public order).



4. If a State party requesting information under this article, the other Contracting State must implement its measures in order to obtain the information requested, even though that other State may not need such information for its own tax purposes. The obligation under the preceding sentence is subject to the limitations of paragraph 3 but in no case does such restrictions it is possible for a State party to refrain from providing information on the sole ground that it does not have any fiscal interest in such information.

5. In no case shall the provisions of paragraph 3 be interpreted as meaning that they make it possible for a Contracting State to decline to supply information solely because the information is held by a bank, other financial institution, the representative or person who acts as authorized or as trustee, or because the information relates to the ownership of a person. In order to provide such information to the tax authorities of the State party, requesting information, could force the disclosure of information covered by this paragraph, notwithstanding the provisions of paragraph 3 or any conflicting provisions in its domestic legislation. '

ARTICLE IX

Under article 28 (3) and (4) (Miscellaneous provisions) be repealed and replaced by the following paragraph:

» 3. Contribution to a retirement fund or another similar institution that offers retirement plans, which are established and recognized for tax purposes in a Contracting State, which is paid by, or on behalf of, a person who provides personal work in the other Contracting State shall, for the purpose of establishing the person's tax payment and profits of an enterprise may be taxed in that other State; shall be dealt with in that other State in the same manner and subject to the same conditions and limitations as contributions to a pension scheme that is recognised for tax purposes in that State, provided that the




(a) the person was not) a resident of this State and was participating in the pension scheme, immediately before he began providing personal work in this State, and

(b)) the pension scheme is recognised by the competent authority of that State as being overall equivalent to the pension schemes that are fiscally recognized in this State. '



ARTICLE X

The agreement added a protocol with the following content:

» PROTOCOL

The Kingdom Of Denmark

and

The Swiss Confederation


is by the signing of the Protocol between the Kingdom of Denmark and the Swiss Confederation amending the agreement for the avoidance of double taxation on income and property taxes, signed in Bern on 23. November 1973, as amended by the Protocol signed at Copenhagen on 11. March 1997, agreed upon the following provisions, which shall form an integral part of the agreement.

1. With regard to article 10, paragraph 3, point (b), and article 28, paragraph 3,

There is consensus that the term ' a pension fund or other similar institution, which offers pension plans ' includes the following schemes and schemes of the same or substantially the same nature that have been created in accordance with legislation, which have entered into force after the signing of this Protocol:

In Denmark pension schemes covered by title I of the pension tax law.

In Switzerland all schemes covered by











(i)





Federal law on old-age and survivors ' insurance of 20. December 1946;







(ii)





Federal law on invalidity insurance of 19. June 1959;







(iii)





Federal Act on supplementary pensions relating to old-age, survivors ' and invalidity insurance of 6. October 2006;







(iv)





Federal Act on the employment-related retirement, survivors ' and invalidity insurance of 25. June 1982, including unregistered retirement plans, which offer employment related pension schemes, and







(v)





the types of individual retirement schemes approved in accordance with article 82 of the Federal Act concerning old-age, survivors ' and invalidity insurance of 25. June 1982, which is comparable to employment related pension schemes.











There is also a consensus that the term ' retirement fund or pension plan "includes investment funds and trusts in which all interests in funds or trustene are held by pension funds or pension plans.

2. With regard to articles 18 and 19

There is consensus that the term ' pensions ', as used in articles 18 and 19, not only includes periodic payouts, but also sumudbetalinger.

3. With regard to article 27











(a))





There is consensus that there is only requested information exchange when the requesting Contracting State has exhausted all regular sources of information are available under the internal tax process.







(b))





There is consensus that the administrative assistance, contained in article 27 does not include measures that are only directed against simple collection of evidence (' fishing expeditions ').







(c))





There is consensus that the tax authorities of the requesting State shall provide the following information to the tax authorities in the requested State, when they ask for information in accordance with article 27 of the Covenant:





 



(i)





name and address of the person or persons who are the subject of the inquiry or investigation, and, to the extent they are available, other information that encourages the identification of the person, such as date of birth, marital status or tax identification number;





 



(ii)





the period for which the information is requested;





 



(iii)





a statement on the information requested, including their 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 sought;





 



(v)





name and address of any person who is assumed to possess the information requested.







(d))





There is also a consensus that article 27 of the Covenant do not oblige the Contracting States to exchange information on an automatic or spontaneous basis.







(e))





There is a consensus that, in the case of exchange of information should be the administrative procedural rules regarding taxpayers ' rights, shall be provided in the requested Contracting State may be applied before the information is passed to the requesting Contracting State. In addition, there is a consensus that this provision aims to ensure the taxpayer a merger reassuring procedure and not to prevent or unduly delay the process of exchange of information. '











ARTICLE XI

This Protocol shall enter into force following an exchange of notes confirming that the constitutional procedures to be followed in each of the Contracting States before the entry into force of the Protocol, are implemented. The Protocol shall apply:




(a)) in respect of article 10 of the agreement and 23 on dividends due on or after 1 January 2005. January in the year following the year in which this Protocol enters into force;

b) in the case of article 18 of the agreement on pensions payable on or after the 1. January in the year following the year in which the Protocol enters into force, with the exception of pensions, from which payments commenced before the date of the signing of the Protocol and, where payouts are made to eligible, who has moved from one Contracting State to another Contracting State prior to this date;

c) as regards article 25, paragraph 5 of the Covenant, on the earliest of the following two dates: notification by Denmark that it has obtained its internal conditions and procedures in order to implement the said piece, or from the date on which an agreement for avoidance of double taxation between Denmark and a third country, which includes a similar provision (arbitration) , have effect;

(d)) with regard to article 27 of the agreement for fiscal years beginning on or after 1 January 2005. January in the year following the year in which this Protocol enters into force;

(e)) in respect of the agreement, article 28, paragraph 3, on contributions paid relating to fiscal years beginning on or after 1 January 2005. January in the year following the year in which this Protocol enters into force.



In witness whereof the undersigned, duly authorized thereto by their respective Governments, have signed this Protocol.

Done at Copenhagen on 21. August 2009 in duplicate in the Danish, German and English, all texts being equally authentic. In the event of a conflict of interpretation between the Danish and the German texts, the English text shall be used.









 

 





In The Case Of The Kingdom Of Denmark





For The Swiss Confederation