(MENAFN- Muscat Daily) H E Christian Winter Switzerland's Ambassador to Oman has said that the recently signed Double Taxation Agreement (DTA) between his country and the sultanate reflects the broader ties Switzerland seeks with GCC.
"The conclusion of the agreement takes into account the growing economic and political importance of the Sultanate of Oman and the entire Gulf region' he told Muscat Daily in an exclusive interview. Switzerland already has similar agreements with Kuwait Qatar and UAE he said.
Switzerland as a member of the European Free Trade Association (EFTA) also has a free trade agreement with all GCC states including Oman. That agreement originally signed in 2009 came into effect on July 1 this year according to Curtis law firm.
H E Winter said 'The trade exchange between our two countries as well as Swiss direct investment in Oman have increased in recent years. Switzerland's exports to Oman amounted to around RO80mn to RO90mn annually while imports from Oman are still relatively modest.'
The Agreement on Avoidance of Double Taxation for Income Tax was signed on May 22 in Switzerland and ratified on July 14 by Royal Decree 31/2015.
According to H E Winter the agreement seeks to avoid double taxation on income between residents in Oman and Switzerland. It also sets limits on corporate taxes on profits and dividends. 'The DTA is expected to enhance economic and trade relations between Switzerland and Oman notably by facilitating direct investment in both countries' he said.
Dividend tax rates have been set at a maximum of 15 per cent at the source state according to Swiss Federal Department of Finance. Dividend payments are set at a maximum of five per cent interest tax is set at a maximum of five per cent and royalty payments are set at a maximum of eight per cent.
Further stipulations state that dividend payments to pension funds and contracting states are only taxable at the recipient's state of domicile. Contributions to pension funds in the other country are also deductible. Likewise certain interest taxes will only be applicable in the recipient's state of domicile.
As part of a 'most favoured nation' clause in the agreement tax rates on royalty payments agreed upon between Oman and other countries will also apply to Switzerland. The agreement also includes provisions on the exchange of information between the countries. In 2014 the largest share of Swiss products and goods exported to the sultanate consisted of watches (33 per cent) pharmaceutical products (29 per cent) and machinery (13 per cent). 'There is still ample scope for further intensifying our economic relations.'
According to H E Winter negotiations over the agreement began in November 2010 and lasted a year and a half until May 2012. After a three-year approval process the agreement was signed in May 2015. Besides this DTA the two countries have had an agreement on avoiding double taxation in the aviation sector since 2007.
He added 'Oman's ambitious objectives to consolidate and expand the country's infrastructure and to diversify its economy will create new opportunities in areas an export-oriented country with a highly competitive economy like Switzerland has of a lot to offer in terms of know-how reliability innovation and high quality products.
'In terms of treaties with Oman in addition to the recently signed Double Taxation Agreement an Agreement on the Promotion and Protection of Investments is in place since 2004. 'These agreements provide a long-term framework for further enhancing economic and trade relations between Switzerland and Oman.'
Switzerland and Oman share several other agreements. An agreement on protecting investments has been in effect since 2005. Since November 2010 an agreement in place offering visa exemptions to holders of diplomatic special and service passports.
The two countries have also cooperated against money laundering environment and road police according to the Swiss Department of Foreign Affairs. Besides Oman Switzerland has signed 51 DTAs and eight tax information exchange agreements with other countries.
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