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Amendments to Tax Convention with Switzerland


Law 4034/2011 ratified the Protocol signed on 4 November 2010 by Greece and Switzerland amending the relevant Convention for the avoidance of double taxation with respect to income taxes. The amending Protocol introduced various amendments which follow the latest version of the OECD Model Tax Convention, the most important being the amendments made in the articles relating to dividends, interest, capital gains as well as to the exchange of information. Taxand Greece examines the amendment looking at how this may affect companies with interests across Greece and Switzerland.

In particular, the key features of the amendments are as follows:
Replacement of Article 10 paragraph 2 of the DTC "Dividends". Under the amended provision, the maximum dividend withholding tax rates that may be imposed by the Source State are:

(i) 5 per cent on the gross amount of dividends when the beneficial owner is a company of the other Contracting State, other than a partnership, participating directly by at least 25 per cent in the share capital of the distributing company or
(ii) 15 per cent on the gross amount of dividends in any other case.

Under the previous regime, the above rates applied only to distributions made by Swiss subsidiaries. Distributions made by Greek subsidiaries of Swiss parent entities could be subject to a maximum withholding tax rate of 35 per cent.

Taxand Greece takes a look at the amendments and other recent tax developments in Greece

Your Taxand contact for further queries is:
Yerassimos C. Yannopoulos
T. +30 210 6967066

Taxand's Take

The amendment explicitly states, among others, that a Contracting State may not deny the provision of information held, among others, by financial institutions, nominees or other persons acting in a fiduciary capacity, provided that certain requirements are satisfied. The date of entry into force of these amendments was 1 January 2012.

Taxand's Take Author