On Ratification of the Protocol between the Government of the Republic of Kazakhstan and the Swiss Federal Council on Amendments and Additions to the Convention between the Government of the Republic of Kazakhstan and the Swiss Federal Council for the Avoidance of Double Taxation with respect to Taxes on Income and on Capital and the Protocol signed in Bern on October 21, 1999
The Law of the Republic of Kazakhstan dated February 11, 2014 No. 173-V SAM
To ratify Protocol between the Government of the Republic of Kazakhstan and the Swiss Federal Council on Amendments and Additions to the Convention between the Government of the Republic of Kazakhstan and the Swiss Federal Council for the Avoidance of Double Taxation with Respect to Taxes on Income and on Capital and Protocol signed in Bern on October 21, 1999, done in Astana on September 3, 2010.
President of the Republic of Kazakhstan N. NAZARBAYEV
PROTOCOL BETWEEN THE GOVERNMENT OF THE REPUBLIC OF KAZAKHSTAN AND THE SWISS FEDERAL COUNCIL ON AMENDMENTS TO THE CONVENTION BETWEEN THE GOVERNMENT OF THE REPUBLIC OF KAZAKHSTAN AND THE SWISS FEDERAL THE COUNCIL FOR THE AVOIDANCE OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL AND THE PROTOCOL SIGNED IN BERN ON OCTOBER 21, 1999
(Entered into force on February 26, 2014 - Bulletin of International Treaties of the Republic of Kazakhstan 2014, No. 2, art. 13)
Government of the Republic of Kazakhstan
and
Swiss Federal Council,
Wishing to conclude a Protocol on amendments to The Convention between the Government of the Republic of Kazakhstan and the Swiss Federal Council for the Avoidance of Double Taxation with respect to Taxes on Income and on Capital, signed in Bern on October 21, 1999 (hereinafter referred to as the Convention), and the Protocol signed in Bern on October 21, 1999 (hereinafter referred to as the Protocol to the Convention), have agreed as follows:
ARTICLE I
The expression "local authorities" used in paragraph 1 of Article 2 (Taxes covered by the Convention) is replaced by the expression "central or local authorities" throughout the text of the Convention.
ARTICLE II
Subparagraph (i) of subparagraph (a) of paragraph 1 of Article 3 (General definitions) of the Convention should read as follows: "(i) the term "Kazakhstan" means the Republic of Kazakhstan. For geographical purposes, the term "Kazakhstan" means the State territory of the Republic of Kazakhstan and the zones in which Kazakhstan can exercise its sovereign rights and jurisdiction, in accordance with its legislation and international law, including international treaties to which it is a party;".
ARTICLE III
Subparagraph (d) of paragraph 2 of Article 4 of the Convention (Resident) should be worded as follows: "(d) If his status cannot be determined in accordance with subparagraphs (a) to (c), the competent authorities of the Contracting States shall resolve the matter by mutual agreement.".
ARTICLE IV
1. Paragraph 2 of Article 10 (Dividends) of the Convention shall be worded as follows: «2. However, such dividends may also be taxed in the Contracting State in which the company paying the dividends is resident and according to the laws of that Contracting State, but if the recipient is the beneficial owner of the dividends, the tax so charged should not exceed: a) 5 percent of the total amount of dividends if the actual owner is a company (other than a partnership) that directly owns at least 10 percent of the capital of the company paying the dividends; b) 15 percent of the total amount of dividends in all other cases. 3. Notwithstanding the provisions of paragraph 2, dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State shall be taxable only in that other State if the beneficial owner is: a) a pension fund or other similar institutions that provide pension schemes in which individuals can participate for the purpose of providing pensions, disability and survivor benefits. At the same time, such a pension fund or other similar institutions are recognized for tax purposes and controlled in accordance with the laws of another State, or b) the central (national) bank of that other State. 4. The competent authorities of the Contracting States shall decide by mutual agreement on the manner of application of these restrictions. Paragraphs 2 and 3 do not affect the taxation of the company in respect of profits from which dividends are paid.". 2. Paragraph 3 of Article 10 (Dividends) of the Convention should become paragraph 5.3. Paragraph 4 of Article 10 (Dividends) of the Convention should be worded as follows: «6. The provisions of paragraphs 1 to 3 shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, carries on business in the other Contracting State of which the company paying the dividends is a resident through a permanent establishment located there, or provides independent personal services in that other Contracting State from a permanent base located there, and the holding company in respect of which dividends are paid, is indeed associated with such a permanent establishment or fixed base. In this case, the following provisions apply: Articles 7 or Article 14, as the case may be.". 4. Paragraphs 5 and 6 of Article 10 (Dividends) of the Convention should become paragraphs 7 and 8.
ARTICLE V
Paragraph 5 of Article 25 (Mutual agreement procedures) of the Convention should be worded as follows: «5. Where, (a) in accordance with paragraph 1, a person has submitted a case to the competent authority of a Contracting State on the basis that the actions of one or both Contracting States have resulted in the taxation of that person not in accordance with the provisions of this Convention, and (b) the competent authorities cannot agree to resolve the case in accordance with in accordance with paragraph 2, within three years from the date of submission of the case to the competent authority of the other Contracting State, all outstanding issues, The issues arising from the case must be submitted to arbitration if the person so requests. However, these unresolved issues should not be submitted to arbitration if decisions on them have already been rendered by a court or an administrative tribunal of some kind. States. Except if the person directly involved in the case does not agree to a mutual agreement that implements the award, the award will be binding on both States and will be carried out regardless of the time limits provided for by the national legislation of those States. The competent authorities of the Contracting States shall decide by mutual agreement on the manner of application of this paragraph. The Contracting States may disclose to the Arbitration Board established in accordance with the provisions of this paragraph such information as is necessary for the conduct of the arbitration procedure. The members of the Arbitration Board are subject to the restrictions on disclosure described in paragraph 2 of Article 26 with respect to disclosed information.".
ARTICLE VI
Article 26 of the Convention (Exchange of information) should be worded as follows: "Article 26 Information exchange
1. The competent authorities of the Contracting States shall exchange information that may be relevant for the implementation of the provisions of this Convention or for the administration or enforcement of national legislation in respect of taxes covered by The Convention, to the extent that the basis for taxation does not contradict the Convention. The exchange of information is not limited to Article 1.2. Any information received by a Contracting State pursuant to paragraph 1 shall be considered confidential in the same way as information obtained under the national legislation of that State and will be disclosed only to persons or authorities (including courts and administrative authorities) engaged in the assessment or collection, enforcement or prosecution, or consideration of appeals concerning taxes referred to in paragraph 1. Such persons or authorities should use the information only for these purposes. They may disclose this information during court proceedings or when making court decisions. Nevertheless, information received by a Contracting State may be used for other purposes if that information is used in accordance with the laws of both States and the competent authority of the other Contracting State authorizes such use. 3. In no case shall the provisions of paragraphs 1 and 2 be interpreted as imposing an obligation on a Contracting State.: (a) To take administrative measures contrary to the laws and administrative practices of that or the other Contracting State; (b) To provide information that cannot be obtained under the laws or in the ordinary course of administrative practice of that or the other Contracting State; c) provide information that would disclose any trade, business, industrial, commercial or professional secret, or trade process, or information the disclosure of which would be contrary to government policy (public practice). 4. If information is requested by a Contracting State in accordance with this Article, the other Contracting State should use its information collection measures to obtain the required information, even though that other State may not need such information for its own tax purposes. The obligation contained in the previous sentence is subject to the limitations of paragraph 3, but in no case should such a restriction be interpreted as allowing a Contracting State to deviate from providing information simply because the Contracting State has no domestic interest in such information. 5. In no case shall the provisions of paragraph 3 be interpreted as authorizing a Contracting State from refusing to provide information solely because the information is held by a bank, other financial institution, candidate or a person acting for an agency or in the position of a trustee, or because it relates to the ownership of the person. In order to obtain such information, the tax authority of the requested Contracting State must have the authority to ensure the disclosure of the information provided for in this paragraph, notwithstanding paragraph 3 or any conflicting provisions of its national legislation.".
ARTICLE VII
1. Paragraph 2 of the Protocol to the Convention should be supplemented with subparagraph (d) as follows: "(d) In subparagraph (a) of paragraph 3 of Article 10 (Dividends), the term "pension fund or other similar institution whose type of activity is pension provision" includes the following other similar schemes established in accordance with legislation effective after the date of signature of this Protocol: (i) including plans and schemes of the Republic of Kazakhstan in accordance with the Law of the Republic of Kazakhstan "On Pension Provision in the Republic of Kazakhstan" dated June 20, 1997 No. 136. (ii) including plans and schemes of Switzerland (aa) Federal Law on Pension Insurance for Survivors dated December 20, 1946; (bb) Federal Law on Insurance for the Disabled dated June 19, 1959; (cc) Federal Law on Pension Provision, Insurance for Survivors and the Disabled dated October 6, 2006; (dd) The Federal Law on Pension Provision for Persons with Disabilities in Accordance with Seniority, including Employment and Sole Proprietorship, dated June 25, 1982, including unregistered voluntary pension Contributions under an Individual Occupational Pension Plan, and (ee) self-employment of citizens are compared with occupational pension schemes in accordance with article 82 of the Federal Law on Pension Insurance for the Remaining The living and the disabled are paid in respect of employment or self-employment dated June 25, 1982. In addition, the term "pension fund or pension plan includes investment funds, trusts and associations representing the interests of pension funds, trusts or associations that are auxiliary to pension funds and schemes.". 2. Add paragraphs 4, 5, and 6 to the Protocol to the Convention after paragraph 3 as follows: "4. In relation to Articles 18 and 19, which means that the term "pensions" is used in Articles 18 and 19, respectively, applies not only to periodic payments, but also includes payments of a lump sum. 5. In relation to Article 26 (a) The exchange of information will take place only after the requesting Contracting State has exhausted its usual procedures under national law for the right to receive information. b) It should be understood that the "appropriateness" standard is intended for the exchange of information on tax matters to the maximum extent possible and at the same time clarifies that Contracting States do not have the right to request information that is unlikely to be relevant to the taxation of a taxpayer. (c) It should be understood that the tax authorities of the requesting Contracting State provide the following information to the tax authorities of the requested Contracting State when making a request for information in accordance with Article 26 of the Convention: (i) Full name and address of the person(s) under review or investigation, and other necessary identifying information about the person, such as date of birth, marital status, taxpayer identification number; (ii) the time period for which the information is requested; (iii) a statement of the need for information, including its nature and the form in which the requesting Contracting State would like to receive information from the requested Contracting State; (iv) the tax purposes for which the information is requested; (v) The full name and address of any person believed to have the necessary information in relation to the requested information. information. (d) It is understood that Article 26 of the Convention does not require Contracting States to exchange information on an automatic or arbitrary basis. f) It should be understood that in the case of an exchange of information, the administrative and procedural rules regarding the rights of a taxpayer provided for in the requested Contracting State remain applicable until the information is transmitted to the requesting Contracting State. In the future, it should be understood that this provision is intended to guarantee the taxpayer the fairness of the procedures, as well as to prevent or unreasonably delay the exchange of information. 6. For all Articles Both Contracting States hope that the provisions of The Conventions, which are drawn up in accordance with the relevant provisions of the OECD Model Convention on Income and on Capital, have the same meaning as those presented in the OECD Comments in relation to and in accordance with those applied in each of the Contracting States. Commentary - subject to change from time to time – is a means of interpretation Vienna Convention on the Law of Treaties of May 23, 1969.".
ARTICLE VIII
1. Each of the Contracting States shall notify the other through diplomatic channels of the completion of the constitutional formalities necessary in each of the Contracting States for the entry into force of this Protocol. 2. This Protocol shall enter into force on the date of the last notification and shall be distributed: (a) In respect of withheld tax on amounts paid or credited on or after the first day of January of the year following the entry into force of this Protocol; (b) In respect of other taxes for the financial year beginning on or after the first day of January of the year following the entry into force of this Protocol. 3. Notwithstanding paragraph 2 of this Article, with respect to Article 26 of the Convention, the exchange of information prescribed in this Protocol shall apply to information in any calendar year or any period beginning on or after the first of January in the year following the entry into force of this Protocol.
In witness whereof, the undersigned representatives, duly authorized thereto by their respective Governments, have signed this Protocol.
Done in Astana on September 3, 2010, in two copies, each in the Kazakh, Russian, German and English languages, all texts being equally authentic. In case of discrepancies between the texts, the Contracting States shall use the English text.
For the Government of the Swiss Republic of Kazakhstan The Federal Council
RCPI's note! The following is the text of the Protocol in English and German.
President
Republic of Kazakhstan
© 2012. RSE na PHB "Institute of Legislation and Legal Information of the Republic of Kazakhstan" of the Ministry of Justice of the Republic of Kazakhstan
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