Austria and Switzerland have signed a protocol amending their 1974 income and capital tax treaty, introducing anti-abuse measures, revised dividend withholding tax rules, updated permanent establishment provisions and broader tax information exchange.
The Swiss State Secretariat for International Finance that Austria and Switzerland signed an amending protocol to their 1974 income and capital tax treaty on 30 July 2026.
The protocol updates the treaty to implement the minimum standards on preventing double taxation and tax abuse and reflects changes since the previous revision under the 2009 amending protocol. It is the sixth protocol to amend the treaty.
Key changes include:
- Tax abuse rules: Introduction of a Principal Purpose Test (PPT) to deny treaty benefits where one of the principal purposes of an arrangement is to obtain those benefits. The treaty preamble is also updated to address tax evasion, tax avoidance and treaty shopping.
- Dividends: The maximum withholding tax rate remains 15%. A 0% withholding tax applies to dividends paid to companies holding at least 10% of the capital for at least 365 days. Pension funds and the two countries’ national banks are also exempt.
- Permanent establishments: The protocol updates the rules for dependent agents and introduces anti-fragmentation measures for closely related enterprises.
- Tax collection: A new provision allows each country to assist the other in collecting tax claims.
- Exchange of information: Information exchange is expanded to cover all foreseeably relevant information for tax administration and enforcement, and bank secrecy cannot be used to refuse requests.
The protocol will enter into force on the first day of the second month after the exchange of the instruments of ratification and will apply from 1 January of the year following its entry into force.
Earlier, the Austrian Council of Ministers approved the signing of the sixth protocol amending the 1974 income and capital tax treaty with Switzerland at its meeting on 1 July 2026.
