Switzerland and the Netherlands have signed a new double taxation agreement in the area of income tax, which will replace the existing DTA of 1951/1966.

The agreement contains provisions on the exchange of information in accordance with the OECD standard, worked out in line with the key points decided by the Swiss Federal Council.

The agreement is the latest in a long line of DTAs that have been signed by jurisdictions in recent weeks.

Compared with the current DTA, improvements have been made in the following areas: the percentage holding for withholding tax exemption for dividends has been reduced from 25 per cent to 10 per cent; dividend payments to pension funds will be exempt from tax in the source state in future; and a zero rate has been agreed for interest.

The Conference of Cantonal Finance Directors and the business associations largely welcome the signing of the agreement, the Swiss government said in a statement.

The Swiss parliament must now approve the DTA for it to enter into force, and also has the option of subjecting it to a referendum. The partner state must also provide its approval. Once these conditions have been met the date of entry into force depends on the agreement reached.