Switzerland and Poland new DTA have entered into force

The Protocol of Amendment of 20 April 2010 entered into force on 17 October 2011

Along with the administrative assistance clause according to the OECD standard, withholding tax exemption for dividend payments from significant holdings as well as for dividend payments to pension funds was agreed with Poland. The term significant holding refers to a stake of at least 10% (previously 25%) in the capital of the company making the payment, provided it has been held for at least two years.

The Protocol of Amendment sets out the right of the source state to levy 5% tax on interest and royalty payments; withholding tax exemption is provided for in the case of interest and royalty payments between related companies.

Contributions to a pension fund in the other contracting state will now be tax-deductible. In addition, the Protocol of Amendment to the DTA contains an arbitration clause.

The provisions of the Protocol of Amendment will apply from 1 January 2012, with the exception of those concerning the withholding tax rates for interest and royalty payments. These will apply from 1 July 2013. The Protocol of Amendment has been approved by parliament in both countries.