ry EMBASSY OF SWITZERLAND The Agreement between Switzerland and India for the Avoidance of Double Taxation with respect to taxes on income (DTAA) ‘The Agreement for the Avoidance of Double Taxation between Switzerland and India became effective in Switzerland on 1" January 1995, and in India on 1" April 1995. In the case of India it covers income tax, including surcharge thereon. For Switzerland, it covers Federal, Cantonal and Communal taxes on income which are broadly circumscribed as total income, camed income, income from capital, industrial and commercial profits, and capital gains as well as other items of income. The Agreement is based on the definition of permanent establishment and deserves special attention to Dividends, Interests, Royalties and Fees for Technical Services, which are the most frequent sources of income between the contracting parties. ‘The relief granted for the elimination of double taxation may take different forms (lump sum reduction, credit, partial exemption). Finally, the Agreement contains a section on the exchange of information necessary to carry out its provisions. On 16" February 2000, Switzerland and India signed a Protocol amending the DTAA. The Protocol aimed mainly at lowering the withholding tax rates as follows: Sources of Income Previous Rates New Rates. Dividends 15% 10% Interest 15% + 10% 10% Royalties and 20% - 15% 10% Fees for Technical Services The Protocol also widened the definition of Fees for Technical Services to cover a larger number of payments (¢.g., payments for managerial services). Furthermore, India may tax capital gains earned by Swiss residents from transfer of shares of companies resident in india, unlike at present where certain exemptions have been provided, The intemal legal requirements and procedures were completed at both sides to put into force this Protocol, and subsequently, it beeame effective, in Switzerland, in respect of income arising in the fiscal year beginning on or after 1“ January 2001 and, in India, in respect of income arising in the fiscal year beginning on or after 1* April 2001. The new provisions under the Protocol help in increasing the flows of investment, technology, trade and services between the two countries. New Delhi, July 2003 461.20-NMO* i AGREEMENT BETWEEN THE SWISS CONFEDERATION AND THE REPUBLIC OF INDIA FOR THE AVOIDANCE OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOME THE SWISS FEDERAL COUNCIL AND THE GOVERNMENT OF THE REPUBLIC OF INDIA DESIRING to conclude an Agreement for the avoidance of double taxation with respect to taxes on income, HAVE AGREED as follows:Article 1 Personal scope This Agreement shall apply to persons who are residents of one or both of the Contracting States: