AUSTRALIAN TAX TREATIES

Swiss Convention  

CONVENTION BETWEEN AUSTRALIA AND THE SWISS CONFEDERATION FOR THE AVOIDANCE OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOME, WITH PROTOCOL  

CHAPTER IV - RELIEF FROM DOUBLE TAXATION  

ARTICLE 22   Elimination of double taxation  

1  
Subject to the provisions of the laws of Australia which relate to the allowance of a credit against Australian tax of tax paid in a country outside Australia (which shall not affect the general principle of this Article), Swiss tax paid under the laws of Switzerland and in accordance with this Convention, in respect of income derived by a resident of Australia shall be allowed as a credit against Australian tax payable in respect of that income.

2  
In the case of Switzerland, double taxation shall be avoided as follows:


a) Where a resident of Switzerland derives income which, in accordance with the provisions of this Convention, may be taxed in Australia, Switzerland shall, subject to the provisions of subparagraph b), exempt such income from tax but may, in calculating tax on the remaining income of that resident, apply the rate of tax which would have been applicable if the exempted income had not been so exempted. However, such exemption shall apply to gains referred to in paragraph 4 of Article 13 only if actual taxation of such gains in Australia is demonstrated.


b) Where a resident of Switzerland derives dividends, interest or royalties which, in accordance with the provisions of Articles 10 , 11 or 12 , may be taxed in Australia, Switzerland shall allow, upon request, a relief to such resident. The relief may consist of:


(i) a deduction from the tax on the income of that resident of an amount equal to the tax levied in Australia in accordance with the provisions of Articles 10 , 11 or 12 ; such deduction shall not, however, exceed that part of the Swiss tax, as computed before the deduction is given, which is appropriate to the income which may be taxed in Australia; or

(ii) a lump sum reduction of the Swiss tax; or

(iii) a partial exemption of such dividends, interest or royalties from Swiss tax, in any case consisting at least of the deduction of the tax levied in Australia from the gross amount of the dividends, interest or royalties.
Switzerland shall determine the applicable relief and regulate the procedure in accordance with the Swiss provisions relating to the carrying out of international conventions of the Swiss Confederation for the avoidance of double taxation.

3  
A company which is a resident of Switzerland and which derives dividends from a company which is a resident of Australia shall be entitled, for the purposes of taxation in Switzerland with respect to such dividends, to the same relief which would be granted to the company if the company paying the dividends were a resident of Switzerland.




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