Protocol Amending the Convention between the Government of Canada and the Swiss Federal Council for the avoidance of Double Taxation with Respect to Taxes on Income and on Capital, done at Berne on 5 May 1997


This electronic version of the Protocol Amending the Canada-Switzerland Tax Convention signed on October 22, 2010, is provided for convenience of reference only and has no official sanction.


Desiring to conclude a Protocol amending the Convention between the Government of Canada and the Swiss Federal Council for the Avoidance of Double Taxation with respect to Taxes on Income and on Capital, done at Berne on 5 May 1997 (the “Convention”),

Have agreed as follows:

Paragraph 2 of Article 3 (General Definitions) of the Convention shall be deleted and replaced by the following:
Paragraph 1 of Article 4 (Resident) of the Convention shall be amended by adding the following sentence at the end of the paragraph:
The amended paragraph shall therefore read as follows:

Paragraph 3 of Article 9 (Associated Enterprises) of the Convention shall be amended by deleting the word “five” and replacing it with the word “six”.

The amended paragraph shall therefore read as follows:

1. Subparagraph (b) of paragraph 2 of Article 10 (Dividends) of the Convention shall be deleted and subparagraph (c) shall be renumbered as subparagraph (b).

2. The following new paragraph 3 shall be added to Article 10 of the Convention:

(a) the Bank of Canada or the Swiss National Bank; or

(b) a resident of the other Contracting State:

(i) that was constituted and is operated exclusively to administer or provide benefits under one or more pension or retirement plans; or

(ii) that is operated exclusively to earn income for the benefit of one or more residents of that other Contracting State each of which satisfy clause (i),

provided that:

(iii) each pension or retirement plan provides benefits primarily to individuals who are residents of that other Contracting State;

(iv) the dividends are not derived from carrying on a trade or a business or from a related person; and

(v) the competent authorities of the Contracting States agree that each pension or retirement plan generally corresponds to a pension or retirement plan recognized for tax purposes in the first-mentioned State.”

3. Paragraph 3 of Article 10 shall be renumbered as paragraph 4.

4. Paragraph 4 of Article 10 shall be renumbered as paragraph 5 and the reference to “paragraphs 1 and 2” shall be replaced by “paragraphs 1, 2 and 3”.

5. Paragraphs 5 and 6 of Article 10 shall be renumbered as paragraphs 6 and 7 respectively.

6. Paragraph 7 of Article 10 shall be renumbered as paragraph 8 and the reference to “paragraphs 1, 2(c) and 4” shall be replaced by “paragraphs 1, 2(b) and 5”.

The amended Article 10 shall therefore read as follows:

(a) the Bank of Canada or the Swiss National Bank; or

(b) a resident of the other Contracting State:

(i) constituted and operated exclusively to administer or provide benefits under one or more pension or retirement plans; or

(ii) operated exclusively to earn income for the benefit of one or more residents of that other Contracting State each of which satisfy clause (i),

provided that:

(iii) each pension or retirement plan provides benefits primarily to individuals who are residents of that other Contracting State;

(iv) the dividends are not derived from carrying on a trade or a business or from a related person; and

(v) the competent authorities of the Contracting States agree that each pension or retirement plan generally corresponds to a pension or retirement plan recognized for tax purposes in the first-mentioned State.

(i) by the company, or

(ii) by a person related thereto from the same or a similar business as that carried on by the company,

under this sub-paragraph (d); for the purposes of this sub-paragraph (d), a company is related to another company if one company directly or indirectly controls the other, or both companies are directly controlled by the same person or persons, or if the two companies deal with each other not at arm’s length.

1. Paragraphs 3 and 4 of Article 11 (Interest) of the Convention shall be deleted and replaced by the following:

(a) interest arising in Switzerland and paid to a resident of Canada shall be taxable only in Canada if it is paid in respect of a loan made, guaranteed or insured, or a credit extended, guaranteed or insured by Export Development Canada;

(b) interest arising in Canada and paid to a resident of Switzerland shall be taxable only in Switzerland if it is paid in respect of a loan made, guaranteed or insured, or a credit extended, guaranteed or insured by the Swiss Export Risk Insurance; and

(c) interest arising in a Contracting State and paid to a resident of the other Contracting State shall not be taxable in the first-mentioned State if the beneficial owner of the interest is a resident of the other Contracting State and is not related to the payer.

2. Paragraph 6 of Article 11 shall be amended by deleting the reference “The provisions of paragraph 1, 2, 3 and 4” and replacing it with “The provisions of paragraph 1, 2 and 3”.

The amended paragraph shall therefore read as follows:

In subparagraph (c) of paragraph 3 of Article 12 (Royalties) of the Convention, the words “where the payer and the beneficial owner of the royalties are not related persons,” shall be deleted.

The amended subparagraph shall therefore read as follows:

1. Paragraph 7 of Article 13 (Capital Gains) of the Convention shall be amended by adding the words “other than property to which the provisions of paragraph 8 apply,” after the words “from the alienation of any property,”.

2. The following paragraph 8 shall be added to Article 13 of the Convention:
Paragraph 1 of Article 18 (Pensions and Annuities) of the Convention shall be deleted and replaced by the following:

Subparagraph (c) of paragraph 1 of Article 22 (Elimination of Double Taxation) of the Convention shall be deleted and subparagraph (d) shall be renumbered as subparagraph (c).

1. Paragraph 1 of Article 24 (Mutual Agreement Procedure) of the Convention shall be amended by deleting the word “two” and replacing it with the word “three”.

The amended paragraph shall therefore read as follows:
2. Paragraph 2 of Article 24 of the Convention shall be amended by adding the following sentence at the end of the paragraph:
The amended paragraph shall therefore read as follows:

3. Paragraph 3 of Article 24 of the Convention shall be amended by deleting the word “five” and replacing it with the word “six”.

The amended paragraph shall therefore read as follows:
4. The following paragraphs 6 and 7 shall be added to Article 24 of the Convention:

Article 25 (Exchange of Information) of the Convention shall be deleted and replaced by the following provisions:

Exchange of Information

An Interpretative Protocol shall be added to the Convention with the following provisions:

INTERPRETATIVE PROTOCOL

The Government of Canada

and

the Swiss Federal Council

Have agreed at the signing of the Protocol amending the Convention between the Government of Canada and the Swiss Federal Council for the Avoidance of Double Taxation with respect to Taxes on Income and on Capital , done at Berne on 5 May 1997 (the “Convention”), on the following provisions, which shall form an integral part of the Convention:
1. The Contracting States shall notify each other in writing through diplomatic channels once they have satisfied their domestic requirements for the entry into force of this Protocol. This Protocol shall enter into force on the date of the later of these notifications and its provisions shall have effect:
2. Notwithstanding the provisions of paragraph 1,

In witness whereof, the undersigned, duly authorized to that effect, have signed this Protocol.

Done in duplicate at Bern, this 22nd day of October 2010, in the French and English languages, each version being equally authentic.

Josée Verner
Minister of Intergovernmental Affairs, President of the Queen’s Privy Council for Canada and Minister for La Francophonie

FOR THE GOVERNMENT OF CANADA

Hans-Rudolf Merz
Federal Councillor and Head of the Federal Department of Finance


FOR THE SWISS FEDERAL COUNCIL

Report a problem or mistake on this page
Please select all that apply:

Thank you for your help!

You will not receive a reply. For enquiries, contact us.

Date modified: