Switzerland and Hungary sign new double taxation agreement



 12 September 2013 in Budapest, Switzerland and Hungary signed a new double taxation agreement in the area of taxes on income and assets. It replace the agreement of 9 April 1981.

The new DTA contains provisions on the exchange of information in accordance with the international standard applicable at present. Aside from an OECD administrative assistance clause, Switzerland and Hungary have agreed that both countries may levy withholding tax of no more than 15% on gross dividend amounts. If, however, a company holds a stake of at least 10% in the capital of the distributing company, the dividends will be exempt from withholding tax. In addition, interest and royalty payments will be taxable only in the state of residence. Finally, gains realized on the sale of shares in real estate companies can now be taxed in the country where the real estate is located. The new agreement still has to be approved by parliament in both countries before it can come into force.