Switzerland and Georgia have signed a double taxation agreement in an accord that does not include a controversial standard on the exchange of information set by the Organisation for Economic Co-operation and Development.

At present, most recently signed DTAs include an agreement that if one of the signatories wants data on a specific individual, that the other signatory jurisdiction must pass it over. However, under the Swiss-Georgia agreement, this provision does not apply.

The agreement, therefore, appears to be a mere formality rather than a substantive one.

Although the agreement does not include the article on administrative assistance – in line with Swiss practice at the time of negotiation – it largely follows the OECD model convention.

DTAs aim to prevent an individual or corporation from being double taxed by two different countries. There has not been a DTA between Georgia and the Alpine state prior to this agreement.

In the case of dividend payments to beneficial owner companies, which have a stake of at least 10 per cent in the capital of the company making the payment, and in the case of all interest and royalty payments, it was possible to agree on taxation exclusively in the contracting state of the recipient of the payment, thus creating a so-called zero rate, Switzerland said in a statement.

To allow the DTA to come into force quickly, Switzerland and Georgia agreed not to add the OECD administrative assistance clause. The DTA will now have to be approved by the Swiss parliament. However, as this is not a controversial agreement, it should pass parliament without any problems.