DTA Abuse

DTA abuse refers to cases where tax relief is claimed in an abusive or unlawful manner based on double taxation agreements. Switzerland has taken measures to counter this. The Federal Tax Administration circulars dated 31 December 1962, 17 December 1998 and 1 July 2010 contain detailed explanations. More information on DTA abuse can be found on the website of the State Secretariat for International Finance SIF.

Note: The Swiss Federal Council has repealed the Ordinance on Measures against the unjustified use of Federal Double Taxation Agreements ("BRB 62") as of 01.01.2022.

Questions & answers to the DTA abuse

Frequently asked questions (FAQ) concerning the application of Swiss anti-abuse provisions to payments of dividends, interest and royalties from the EU to associated corporations in Switzerland (Article 15 of the Agreement on the Taxation of Savings).

• Our company receives revenue from a company domiciled in the EU. This revenue was taxed at source under Article 15 of the Agreement on the Taxation of Savings with the EC. Do the Swiss anti-abuse regulations also apply to this income?

  Yes. The 1962 FCD and all related implementing regulations also apply to such revenue because Article 15 of the Agreement on the Taxation of Savings with the EC is materially a provision of a multilateral double taxation agreement.

• In cases where tax relief has been obtained on dividends, interest or royalties under Article 15 of the Agreement on the Taxation of Savings with the EC, must the R-Mb KS 1999 *) declaration be submitted?

  Yes, since Article 15 of the Taxation of Savings Income Agreement is regarded as a multilateral double taxation agreement and thus has the same effects in this respect as other double taxation agreements.

• Our company also receives revenue from Belgium, France and Italy which was taxed at source based on Article 15 of the Agreement on the Taxation of Savings with the EC. Do the supplementary forms R-Ba, R-Fa or R-Ia also have to be completed and submitted in this case?

  No. In such cases, the R-Mb KS 1999 *) declaration must be submitted, as the special provisions of the 1999 circular also apply to revenue taxed at source under Article 15 of the Agreement on the Taxation of Savings with the EC. This applies in general, i.e. not only to revenue from the three countries mentioned, but to revenue from all EU countries (see previous answer). Of course, the supplementary forms mentioned above must still be submitted if relief is requested based on the double taxation agreements with Belgium, France or Italy.

• We have heard that the 1962 FCD is also applicable to revenue which is taxed at source based on Article 15 of the Agreement on the Taxation of Savings with the EC. But how does our company benefit from this relief (procedures, requests, forms, etc.)?

  The withholding tax relief (applies only to companies qualifying for this under Art. 15 of the Agreement on the Taxation of Savings) in the respective EU member states is governed by the implementing and procedural regulations applicable there. All of the respective procedural regulations in the individual EU states are not yet known. However, we will keep you informed about the current state of affairs in this area in the «News» section of our website (see e. g. our report of 19 January 2006 concerning the Netherlands).

Further information

DTA abuse (SIF)

(in German and French only)