Countries that have concluded double taxation treaties with Switzerland include: a Joint Economic and Trade Commission was established in November 2009 to strengthen bilateral economic relations, trade and investment. Several bilateral agreements govern economic relations between Switzerland and Indonesia, including a bilateral trade agreement (1955), an air services agreement (1980, revised in 1993 and 2016) and a double taxation convention (1989, revised in 2007), while an investment protection convention (1976) was unilaterally denounced by Indonesia in 2015. On 13 March 2009, the Federal Council announced Switzerland`s intention to adopt the OECD standards on administrative assistance in tax matters, in accordance with Article 26 of the OECD Model Convention. The Decision authorises the exchange of information with other countries in specific cases where a concrete and reasoned request has been made. The Federal Council has decided to withdraw the corresponding reservation to the OECD Model Convention and to start negotiations on the revision of the double taxation conventions. However, it states that Swiss banking secrecy remains intact. For all other income and capital, Switzerland applies the « exemption from progression » method to Contracting States in order to avoid double taxation. Therefore, Switzerland will not grant a credit for foreign taxes. The only exception applies to the contract rate for interest at source, royalties and foreign dividends. The competent authorities of the States Parties shall regulate by mutual agreement the nature and effect of such restriction. To quote Kontan.co.id, although the scope of this agreement is linked to general criminal acts, if it turns out that these are efforts to avoid taxes of Indonesian citizens in Switzerland, it can be prosecuted by the tax authorities. Upon signing the Agreement between the Republic of Indonesia and the Kingdom of Denmark for the avoidance of double taxation and the prevention of tax evasion on income, the Signatories agreed that the following provisions shall form part of that Agreement: no withholding tax shall be levied on royalties paid to foreign beneficiaries. Regardless of a double taxation agreement, profits transferred abroad by the Swiss establishment of a foreign company are not subject to withholding tax.
The protocol also provides for the inclusion of inheritance in the agreement. Beneficiaries of an undisclosed Swiss bank account must either pay inheritance tax or consent to the disclosure to the UK authorities. This agreement largely follows the OECD Model Agreement and Swiss policy in this regard. This paragraph shall not affect the taxation of profits on which dividends are paid. Therefore, this cooperation is considered very strategic for Indonesia. In addition, the German-Swiss GwG Agreement does not apply retroactively, which made it possible to detect infringements that could have been committed before the publication of this Regulation. Switzerland has a network of social security agreements which currently have more than 30 lawyers. Switzerland has also concluded a bilateral agreement with the European Union that covers all 27 EU countries and more or less adapts the rules already in force within the European Union. . .