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Switzerland To Recognise Private DTAs

JohnLocke

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Dec 29, 2008
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The Swiss Federal Council has adopted the dispatch on an act to make it possible for private agreements for the avoidance of double taxation to be recognised. The existing powers of parliament and the people will not be restricted as a result, reports the Council.


The federal act will empower the Federal Council to recognise agreements between private institutions for the avoidance of double taxation on income and capital, provided a treaty cannot be concluded for reasons of international law. This concerns territories that Switzerland does not recognise as states. The federal act refers solely to the recognition of contracts for the avoidance of double taxation in relation to such territories.



Double taxation agreements (DTAs) are normally entered into by two states and are thus considered bilateral treaties. The federal act will also make it possible to strengthen economic relations with territories that Switzerland does not recognise as subjects of international law. Other states (e.g. Belgium, the UK, Sweden and Singapore) have similar regulations concerning the recognition of private agreements for the avoidance of double taxation.



The act will probably apply only in relation to a few territories and describes the prerequisites for such recognition in detail. The Federal Council will consult the relevant parliamentary committees in advance. The act is subject to an optional referendum.



 
Switzerland is going down soon as a financial empire, people will find other places for the million of billions they hide in Switzerland.
 
I dont get the reason why offshore jurisdictions sign DTA's with other countries? What do they benefit out of this? What's the reason of having an offshore account if you end up paying taxes anyway. Might as well open an account at home and pay your taxes like a regular citizen.
 
The reason for why they sign TIEA's and DTA's may be to get off the grey and black list of the OECD, this helps in serving large corporations who seek to reduce tax and even eliminate taxes entirely but in a legal way. It seems that it is a big misunderstanding that tax havens / low tax jurisdictions are only born to hide from tax authorities.


The largest fortune 500 and even 5000 corporations have already find a way to avoid all the troubles in hiding for tax authorities but instead legally find ways to reduce and even eliminate taxes! The one that has the biggest problem is the man on the ground or small companies who don't want to pay tax and don't have the budget to make a proper tax structure which involves advanced set ups of the offshore company structure and banking so it is costly and requires a good portion of knowledge in tax and legal matters which professional tax and legal advisors may help with.