International students studying in the UK should be aware that there are specific rules on taxation and national insurance and specific visa requirements. Each case is different and students should turn to the East Student International Affairs Council or go to a professional specializing in international taxation to be sure of their tax debts. On 13 March 2009, the Federal Council announced that Switzerland intends to adopt OECD standards for mutual tax assistance, in accordance with Article 26 of the OECD Model Tax Convention. The decision allows the exchange of information with other countries in individual cases where a concrete and reasoned request has been made. The Federal Council has decided to withdraw the reserve for the OECD`s model tax treaty and to begin negotiations on the revision of double taxation conventions. However, Swiss banking secrecy remains intact. People who live or work abroad and have dual residences are taxable in both countries. In order to determine which country has a tax priority, the DBA will have a set of tie-break rules or tests between the two countries to determine where to pay taxes in order to avoid paying taxes in both countries. Look at the UK government`s help sheet to see if the second country has an agreement with the United Kingdom.
The protocol became necessary to appease the European Commission, which had considered that the agreement could be contrary to the European Treaty. By threatening to refer the matter to the European Court of Justice, the United Kingdom and Switzerland have agreed that account holders who have already paid the 35% withholding tax due under the European Savings Tax will be subject to a final withholding tax of 13% in order to reduce the tax debt on interest payments. In some cases, it is possible for the person to apply for tax relief, but the amount of relief depends on the DBA agreement between the UK and the country from which your income comes. The situation becomes more complicated when tax rates vary from country to country. So what`s going on? To further understand the double taxation convention, we gave a typical example: since there are many rules and complications that can arise in the application of double taxation conventions, it is important to seek the assistance of a qualified and experienced accountant.