During a meeting, the Swiss Federal Council approved a double taxation agreement (DTA) with Jordan on 21 August 2024.

The agreement will create legal certainty and favourable conditions for the further development of bilateral economic relations and tax cooperation between the two countries.

With this DTA, Switzerland can expand its network of double taxation agreements in the Middle East. The agreement will ensure legal certainty and a contractual framework that will have a beneficial impact on the development of bilateral economic relations between the two countries.

The DTA largely corresponds to the Model Convention of the Organisation for Economic Co-operation and Development (OECD) and standard Swiss practice for agreements in this area. It will prevent the double taxation of private individuals and legal entities with an international nexus in the area of income taxes, for example in the case of the taxation of dividends, interest and royalties.

The DTA takes account of the outcomes of the OECD’s base erosion and profit shifting (BEPS) project. Specifically, it contains an abuse clause. This is intended to prevent a person who is resident in neither Switzerland nor Jordan from claiming the benefits provided for in the DTA. Moreover, it contains an administrative assistance clause in accordance with the current international standard for the exchange of information upon request.

The cantons and the business associations concerned have welcomed the conclusion of this DTA, which was signed on 13 December 2023. The agreement still has to be approved by Parliament in Switzerland and in Jordan before it can enter into force.