The Federal Council of Switzerland adopted the dispatch on a revised double taxation agreement (DTA) with Latvia on 28th June 2017 regarding taxes on income and capital. The dispatch was submitted to Parliament for approval.
Switzerland and Latvia signed a protocol of amendment to their DTA on 2nd November 2016. It contains several provisions from the OECD and G20 project to combat base erosion and profit shifting (BEPS project). Specifically, the protocol of amendment contains an abuse clause. This clause to prevent unwarranted claims of treaty benefits is consistent in its basic features with the abuse provisions agreed by Switzerland in most of its DTAs in recent years. Legal certainty will be increased for taxpayers with the inclusion of an arbitration clause. Furthermore, the DTA contains an administrative assistance clause in accordance with the current international standard for the exchange of information upon request. In particular, the agreement will introduce lower taxation of levies and distributed profits on qualified participations.