BERN, SWITZERLAND – Ireland and Switzerland announced Thursday morning 26 January that they have signed a protocol to amend their double taxation treaty, in the area of taxes on income and capital. Under the terms of the new agreement, which must be approved by both parliaments, each country can withhold up to 15 percent on gross dividend amounts, with some significant exceptions: if “a company holds a stake of at least 10 percent in the capital of the distributing company, the dividends will be exempt from withholding tax. Moreover, there will be no withholding taxes on dividends paid to the national banks of the two countries or to pension funds.”

The amendment also includes a OECD administrative assistance clause. Since the OECD insisted in 2009 that Switzerland revise its treaties to match OECD international standards covering judicial assistance in cases of tax avoidance, Switzerland has revised more than 30 double taxation treaties. Switzerland has proposed in some cases to maintain bank secrecy laws at home while helping other governments collect taxes by using withholding taxes that allow holders of assets to choose if they will declare their accounts in order to recover the tax at home, or not. Such agreements have been signed with France and Germany, but the European Union has said it opposes these on the basis that numerous bilateral agreements are not in line with EU rules.

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