The Double Taxation Relief (Taxes on Income) (Switzerland) Order 1994

SCHEDULE PROTOCOL

BETWEEN THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND AND THE SWISS CONFEDERATION AMENDING THE CONVENTION FOR THE AVOIDANCE OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOME, SIGNED AT LONDON ON 8TH DECEMBER 1977, AS AMENDED BY THE PROTOCOL SIGNED AT LONDON ON 5TH MARCH 1981

The Government of the United Kingdom of Great Britain and Northern Ireland and the Swiss Federal Council;

Desiring to conclude a Protocol to amend the Convention between the Contracting Parties for the Avoidance of Double Taxation with respect to Taxes on Income, signed at London on 8th December 1977, as amended by the Protocol signed at London on 5th March 1981 (hereinafter referred to as “the Convention”);

Have agreed as follows:

ARTICLE I

Paragraph (1) of Article 11 (Interest) of the Convention shall be deleted and replaced by the following:

“(1) Interest arising in a Contracting State and paid to a resident of the other Contracting State shall be taxable only in that other State if that resident is the beneficial owner of the interest.”

ARTICLE II

Paragraphs (1) and (4) of Article 12 (Royalties) of the Convention shall be deleted and replaced by the following:

“(1) Royalties arising in a Contracting State and paid to a resident of the other Contracting State shall be taxable only in that other State if that resident is the beneficial owner of the royalties.

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(4) Where, by reason of a special relationship between the payer and the beneficial owner, or between both of them and some other person, the amount of the royalties paid exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last mentioned amount. In that case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Convention.”

ARTICLE III

Paragraph (4) of Article 23 (Non-discrimination) of the Convention shall be deleted and replaced by the following:

“(4) Except where the provisions of paragraph (1) of Article 9, paragraphs (4) and (6) of Article 11, or paragraph (4) of Article 12 apply, interest, royalties and other disbursements paid by an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable profits of such enterprise, be deductible under the same conditions as if they had been paid to a resident of the first-mentioned State.”

ARTICLE IV

(1) Each of the Contracting States shall notify to the other the completion of the procedures required by its law for the bringing into force of this Protocol.

(2) The Protocol shall enter into force on the date of the receipt of the later of these notifications and shall thereupon have effect:

(a) in the United Kingdom, for any year of assessment, financial year or chargeable period beginning on or after 1st April 1995;

(b) in Switzerland, for any taxable year beginning on or after 1st January 1995.