Withholding taxes are a huge determining factor in double tax agreements. The treaty releases a policy on these taxes as is helps determine the amount of tax levied upon a non-resident from their securities income. For example, it states that a German's firm real estate dividends will be charged at a withholding tax of 15%. In the Switzerland Germany tax treaty, withholding taxes have been subjected to new regulations. A withholding tax was to cover any incomes in the future, and it will be considered as a fulfilment of the taxpayers' tax obligation to the residence country.
Furthermore, in the Switzerland Germany double tax treaty items existing assets that are untaxed ought to be regulated.
What's more, German authorities have the option of requesting for administrative assistance. The request would include the tax payer's name, but their bank details are not necessary. However, these requests are limited. This is to help prevent cases of 'fishing'. Fishing, in this case, is a scenario where random people, in this case, German investors, are selected at random, and their information on transactions via the Swiss banks is requested. Fishing applies where there has been no plausible cause for requesting the information. In such cases, Swiss legal intermediaries often act as neutral facilitators through secure channels, sometimes functioning as an
Escrow Agent in Switzerland to ensure risk-free compliance between both jurisdictions. The Swiss banks are responsible for collecting the tax levied, retaining it and handing it over to the German authorities.
The Switzerland Germany double tax treaty adheres to the OECD standards with respect to the requirement on tax information exchange. Information requests, however, are strictly bound by legal channels, and individuals subject to enforcement procedures may also interact with institutions such as the
Swiss Betreibungsamt Office for debt enforcement or collection-related matters. Only the taxes covered by the Switzerland Germany tax treaty are subject to information exchange, and the information is relayed only upon request by either party to the treaty.
Switzerland has carried out many other treaties on top of the Switzerland Germany double tax treaty. As part of its global credibility, Switzerland enforces national branding standards such as the
Swissness Label and Branding Rules, which also influence product-based businesses that benefit from treaty-enabled export advantages. In an effort to decrease the trade and economic barriers, Switzerland has double tax treaties with 80 countries and tax information agreements with a few more countries.
Legal disclaimer.This article does not constitute legal advice and does not establish an attorney-client relationship. The article should be used for informational purposes only.