A new agreement had been signed between China and Switzerland for the avoidance of double taxation on 25 September 2013. The new treaty will replace the current agreement that was signed in 1990.
The dividend withholding tax rate is reduced to 5% from the current 10% rate for companies with a direct shareholding of at least 25% by new tax treaty. Shareholders that do not qualify for the 5% treaty rate may still benefit from a decreasing withholding tax rate of 10% where the domestic withholding tax rates are 10% and 35% under Chinese and Swiss domestic laws, respectively. The withholding tax rate on royalty is decreased from 10% to 9% and that on interest payments remains at 10%.
