Australian Tax Treaties
Swiss Convention
CONVENTION BETWEEN AUSTRALIA AND THE SWISS CONFEDERATION FOR THE AVOIDANCE OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOME, WITH PROTOCOL
CHAPTER III
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TAXATION OF INCOME
ARTICLE 10
Dividends
1
Dividends paid by a company which is a resident of a Contracting State 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:
a) 5 per cent of the gross amount of the dividends if the beneficial owner is a company which, in the case of Australia, holds directly at least 10 per cent of the voting power in the company paying the dividends, or in the case of Switzerland, holds directly at least 10 per cent of the capital in the company paying the dividends;
b) 15 per cent of the gross amount of the dividends in all other cases.
3
Notwithstanding the provisions of paragraph 2 of this Article, dividends shall not be taxed in the Contracting State of which the company paying the dividends is a resident if the beneficial owner of the dividends is a company that is a resident of the other Contracting State that has held directly or indirectly through one or more residents of either Contracting State, shares representing 80 per cent or more, in the case of Australia, of the voting power, or in the case of Switzerland, of the capital of the company paying the dividends for a 12 month period ending on the date the dividend is declared and the company that is the beneficial owner of the dividends:
a) has its principal class of shares listed on a recognised stock exchange specified in subsubparagraph (1)k)(i) or (ii) of Article 3 and regularly traded on one or more recognised stock exchanges;
b) is owned directly or indirectly by one or more companies:
c) does not meet the requirements of subparagraphs a) or b) of this paragraph but the competent authority of the first-mentioned Contracting State determines that paragraph 1 of the Protocol to this Convention does not apply. The competent authority of the first-mentioned Contracting State shall consult the competent authority of the other Contracting State before refusing to grant benefits of this Convention under this subparagraph.
4
Notwithstanding the provisions of subparagraph 2b , dividends shall not be taxed in the Contracting State of which the company paying the dividends is a resident if the beneficial owner of the dividends holds, in the case of Australia, directly no more than 10 per cent of the voting power in the company paying the dividends, or in the case of Switzerland, directly no more than 10 per cent of the capital of the company paying the dividends, and the beneficial owner is:
a) a Contracting State, or political subdivision or a local authority thereof (including a government investment fund);
b) a central bank of a Contracting State;
c) in the case of Australia, a resident of Australia deriving such dividends from the carrying on of complying superannuation activities; or
d) in the case of Switzerland, a pension scheme whose investment income is exempt from Swiss tax.
5
Paragraphs 2 , 3 and 4 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 other amounts which are 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 for the purposes of its tax.
7
The provisions of paragraphs 1 , 2 , 3 and 4 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 - being dividends beneficially owned by a person who is not a resident of the other Contracting State - except insofar as the holding in respect of which such 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
Notwithstanding paragraph 8 , dividends paid by a company that is deemed to be a resident only of one Contracting State pursuant to paragraph 3 of Article 4 may be taxed in the other Contracting State, but only to the extent that the dividends are paid out of profits arising in that State. Where such dividends are beneficially owned by a resident of the first-mentioned State, paragraph 2 of this Article shall apply as if the company paying the dividends were a resident only of the other State.
Dividends paid by a company which is a resident of a Contracting State 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:
a) 5 per cent of the gross amount of the dividends if the beneficial owner is a company which, in the case of Australia, holds directly at least 10 per cent of the voting power in the company paying the dividends, or in the case of Switzerland, holds directly at least 10 per cent of the capital in the company paying the dividends;
b) 15 per cent of the gross amount of the dividends in all other cases.
3
Notwithstanding the provisions of paragraph 2 of this Article, dividends shall not be taxed in the Contracting State of which the company paying the dividends is a resident if the beneficial owner of the dividends is a company that is a resident of the other Contracting State that has held directly or indirectly through one or more residents of either Contracting State, shares representing 80 per cent or more, in the case of Australia, of the voting power, or in the case of Switzerland, of the capital of the company paying the dividends for a 12 month period ending on the date the dividend is declared and the company that is the beneficial owner of the dividends:
a) has its principal class of shares listed on a recognised stock exchange specified in subsubparagraph (1)k)(i) or (ii) of Article 3 and regularly traded on one or more recognised stock exchanges;
b) is owned directly or indirectly by one or more companies:
(i) whose principal class of shares is listed on a recognised stock exchange specified in subsubparagraph (1)k)(i) or (ii) of Article 3 and regularly traded on one or more recognised stock exchanges; or
(ii) each of which, if it directly held the shares in respect of which the dividends are paid, would be entitled to equivalent benefits in respect of such dividends under a tax treaty between the State of which that company is a resident and the Contracting State of which the company paying the dividends is a resident; or
c) does not meet the requirements of subparagraphs a) or b) of this paragraph but the competent authority of the first-mentioned Contracting State determines that paragraph 1 of the Protocol to this Convention does not apply. The competent authority of the first-mentioned Contracting State shall consult the competent authority of the other Contracting State before refusing to grant benefits of this Convention under this subparagraph.
4
Notwithstanding the provisions of subparagraph 2b , dividends shall not be taxed in the Contracting State of which the company paying the dividends is a resident if the beneficial owner of the dividends holds, in the case of Australia, directly no more than 10 per cent of the voting power in the company paying the dividends, or in the case of Switzerland, directly no more than 10 per cent of the capital of the company paying the dividends, and the beneficial owner is:
a) a Contracting State, or political subdivision or a local authority thereof (including a government investment fund);
b) a central bank of a Contracting State;
c) in the case of Australia, a resident of Australia deriving such dividends from the carrying on of complying superannuation activities; or
d) in the case of Switzerland, a pension scheme whose investment income is exempt from Swiss tax.
5
Paragraphs 2 , 3 and 4 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 other amounts which are 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 for the purposes of its tax.
7
The provisions of paragraphs 1 , 2 , 3 and 4 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 - being dividends beneficially owned by a person who is not a resident of the other Contracting State - except insofar as the holding in respect of which such 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
Notwithstanding paragraph 8 , dividends paid by a company that is deemed to be a resident only of one Contracting State pursuant to paragraph 3 of Article 4 may be taxed in the other Contracting State, but only to the extent that the dividends are paid out of profits arising in that State. Where such dividends are beneficially owned by a resident of the first-mentioned State, paragraph 2 of this Article shall apply as if the company paying the dividends were a resident only of the other State.
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