Swiss Confederation - Dividend

Article 10. Dividends 

1.  Dividends paid by a company which is a resident of a ContractingState to a resident of the other Contracting State may be taxed in that other State.

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

3.  Notwithstanding the provisions of paragraph 2, the Contracting State of which the company is a resident shall exempt the dividends paid by that company if:

a.  the beneficial owner of the dividends is a company which is a resident of the other Contracting State and which holds directly at least 10 per cent of the capital of the company paying the dividends; or

b.  the beneficial owner of the dividends is a pension fund; or

c.  as far as Switzerland is concerned, the beneficial owner of the dividends is a social security scheme.

4.  The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of paragraphs 2 and 3.

5.  The provisions of paragraphs 2 and 3 shall not affect the taxation of the company in respect of the profits out of which the dividends are paid.

6.  The term "dividends" as used in this Article means income from shares, "jouissance" shares or "jouissance" rights, mining shares, founders' shares or other rights, not being debt-claims, participating in profits, as well as income from other corporate rights which is subjected to the same taxation treatment as income from shares by the laws of the State of which the company making the distribution is a resident.

7.  The provisions of paragraphs 1, 2, 3 and 9 shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, carries on business in the other Contracting State, of which the company paying the dividends is a resident, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply.

8.  Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not impose any tax on the dividends paid by the company, except insofar as such dividends are paid to a resident of that other State or insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or a fixed base situated in that other State, nor subject the company's undistributed profits to a tax on the company's undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State.

9.  Paragraphs 1, 2 and 8 shall not prevent the Netherlands from applying its domestic tax law to an individual in respect of the so-called "preservative tax assessment" ("conserverende aanslag") that has been issued to that individual, before that person ceased to be a resident of the Netherlands, with respect to a substantial interest in a company. The preceding sentence shall only apply insofar the assessment or a part thereof is still outstanding.

Protocol:

VIII.Ad Article 10

It is understood that the provisions of Article 10 shall not apply, if the relation between the company paying the dividends and the receiving company has been established or maintained mainly for purposes of taking advantage of the benefits provided for in this Article.

IX.Ad Article 10, paragraph 3

It is understood that, on the one hand, there shall be regarded as companies which are residents of the Netherlands and are entitled to the benefits of paragraph 3 of Article 10, the resident taxpayers within the meaning of the Netherlands Corporate Income Tax Act 1969 (“Wet op de vennootschapsbelasting 1969”), as it may be amended or replaced. On the other hand, Swiss companies which are entitled to the benefits of paragraph 3 of Article 10 are the “société anonyme”, the “société à responsabilité limitée”, the “société en commandite par actions”, the “société coopérative”, as well as any other company or entity that is treated as these companies for the purpose of Swiss corporate taxation.

It is understood that the term "pension fund" includes, in the case of Switzerland, the pension schemes according to the Federal Act on old age, widows/widowers and orphans and invalidity insurance payable in respect of employment or self-employment of 25 June 1982, the non registered pension schemes which offer professional pension plans and the forms of individual recognised pension schemes comparable with the professional pension plans in accordance with Article 82 of the above-mentioned Federal Act.

X.Ad Article 10, paragraph 6, Article 11, paragraph 3, and Article 13

Notwithstanding the provisions of paragraph 6 of Article 10, paragraph 3 of Article 11 and Article 13, it is understood that payments on a loan, including payments on value changes of the loan, shall be treated as a dividend insofar as these payments are treated as a distribution by the tax laws of the Contracting State of which the company making the payments is a resident.

XI.Ad Article 10, paragraph 9

Where a resident of Switzerland receives dividends that may be taxed in the Netherlands in accordance with paragraph 9 of Article 10, the Netherlands shall grant a refund. The amount of this refund shall be equal to the tax due in Switzerland on this income but shall in no case exceed 10 per cent of this income.

XII.Ad Articles 10, 11 and 12

Applications for relief at source or the refund of the excess amount of tax have to be lodged with the competent authority of the State levying or having levied the tax, based on an official certificate of residence from the tax authorities of the other Contracting State and in conformity with the national laws and regulations of the State levying or having levied the tax.

XIII.Ad Articles 10 and 13

It is understood that income received in connection with the (partial) liquidation of a company or a purchase of own shares by a company is treated as income from shares and not as capital gains. The credit for tax at source shall be granted for the tax period in which the income is taxed in the State of residence.

It is understood that in case of an assessment as mentioned in paragraph 9 of Article 10 and paragraph 6 of Article 13, postponement of payment shall be granted under the condition that standing security be given.