The Double Taxation Relief and International Tax Enforcement (Switzerland) Order 2010

Statutory Instruments

2010 No. 2689

Capital Gains Tax

Corporation Tax

Income Tax

The Double Taxation Relief and International Tax Enforcement (Switzerland) Order 2010

Made

10th November 2010

At the Court at Buckingham Palace, the 10th day of November 2010

Present,

The Queen’s Most Excellent Majesty in Council

A draft of this Order was laid before the House of Commons in accordance with section 5(2) of the Taxation (International and Other Provisions) Act 2010(1) and section 173(7) of the Finance Act 2006(2) and approved by a resolution of that House.

Accordingly, Her Majesty, in exercise of the powers conferred upon Her by section 2 of the Taxation (International and Other Provisions) Act 2010 and section 173(1) of the Finance Act 2006, by and with the advice of Her Privy Council, orders as follows—

Citation

1.  This Order may be cited as the Double Taxation Relief and International Tax Enforcement (Switzerland) Order 2010.

Double taxation and international tax enforcement arrangements to have effect

2.  It is declared that—

(a) the arrangements specified in the Protocols set out in the Schedule to this Order, which vary the arrangements set out in the Schedule to the Double Taxation Relief (Taxes on Income) (Switzerland) Order 1978(3), have been made with the Swiss Federal Council;

(b) the arrangements have been made with a view to affording relief from double taxation in relation to income tax, corporation tax, capital gains tax and taxes of a similar character imposed by the laws of the Swiss Confederation and for the purpose of assisting international tax enforcement; and

(c) it is expedient that those arrangements should have effect.

Judith Simpson

Clerk of the Privy Council

Article 2

SCHEDULE

EXPLANATORY NOTE

(This note is not part of the Order)

The Schedule to this Order contains two Protocols (“the Protocols”) which further amend a convention between the Government of the United Kingdom of Great Britain and Northern Ireland and the Swiss Federal Council for the Avoidance of Double Taxation with Respect to Taxes on Income (“the Convention”). The Convention was scheduled to the Double Taxation Relief (Taxes on Income) (Switzerland) Order 1978 (S.I. 1978/1408) and previously amended by the arrangements scheduled to the Double Taxation Relief (Taxes on Income) (Switzerland) Order 1982 (S.I. 1982/714), the Double Taxation Relief (Taxes On Income) (Switzerland) Order 1994 (S.I. 1994/3215) and the Double Taxation Relief (Taxes on Income) (Switzerland) Order (S.I. 2007/3465). This Order brings the Protocols into effect.

The Convention aims to eliminate the double taxation of income or gains arising in one country and paid to residents of the other country. It does this by allocating the taxing rights that each country has under its domestic law over the same income and gains, and/or by providing relief from double taxation. It also has specific measures which combat discriminatory tax treatment and provide for assistance in international tax enforcement. The Protocols continue that approach.

The Protocols replace Articles 24 and 25 of the Convention with updated mutual agreement procedure and exchange of information articles which are in line with the new international standards for mutual agreement and exchange of information as set out in the Model Tax Convention on Income and on Capital published by the Organisation for Economic Cooperation and Development (“OECD”). The Exchange of Notes of 26 June 2007 which previously formed an integral part of the Convention as to the interpretation and understanding of certain terms are also replaced.

Article 1 provides for citation.

Article 2 makes a declaration as to the effect and content of the arrangements set out in the Protocols.

The Protocols will enter into force on the date of the later of the notifications by each country of the completion of its legislative procedures. They shall have effect:

(a) with respect to paragraph 5 of Article 24 of the Convention, three years after the date of entry into force; and

(b) for all other matters, for taxable years beginning on or after 1st January of the year next following the date of entry into force.

The date of entry into force will, in due course, be published in the London, Edinburgh and Belfast Gazettes.

A full and final Impact Assessment has not been produced for this Order as a negligible impact on the private or voluntary sectors is foreseen.

(1)

2010 c. 8.

(2)

2006 c. 25.

(3)

S.I. 1978/1408, amended by S.I. 1982/714, 1994/3215 and 2007/3465.