As published on english.aawsat.com, Monday 12 April, 2021.
The Saudi General Authority for Foreign Trade informed the private sector that the double tax agreement (DTA) signed with Switzerland has come into force, according to official sources.
The treaty between the Saudi government and the Swiss Federal Council will come into force starting April and aims to avoid double taxation on income and capital, as well as prevent tax evasion.
This measure prevents double taxation of the income generated from the investor’s activity, reduces the tax burden, and ensures transparency in the tax treatment.
The information obtained by Asharq Al-Awsat state that the provisions in force indicate that the taxes withheld from the source on the amounts paid or due on or after the first day of January for the next year.
The agreement was signed between the Saudi Minister of Finance Mohammed al-Jadaan and the Swiss Minister of Finance Ueli Maurer, who visited the Ministry of Finance headquarters in Riyadh.
Jadaan explained the agreement represents a stable legal framework that defines the tax relationship between Saudi Arabia and Switzerland.
He stressed that it clearly defines what taxation would be imposed by investors from both countries when exercising their activities in the contracting state, preventing double taxation on the income derived from investors’ activity.
This agreement reduces the tax burden on investors and is expected to achieve transparency in the tax system.
The Minister also called on businesses in the two countries to benefit from the advantages and reductions in taxes to establish more joint commercial and investment projects.
He pointed out that the trade exchange between the Kingdom and Switzerland, which reached SR10.3bn in 2016, does not reflect the size of the economies of both countries.
Moreover, he urged Swiss businesses to learn more about investment opportunities, industries and commodities in order to increase Swiss imports from Saudi Arabia.