Prime Minister Stephen Harper announces New Air and Double Taxation Agreements with Switzerland

October 22, 2010

BERN, SWITZERLAND – Prime Minister Stephen Harper today announced that Canada and Switzerland have concluded two new bilateral agreements to strengthen air transportation and promote trade and investment between the two countries.  Prime Minister Harper made the announcement following a meeting with Doris Leuthard, President of the Swiss Confederation. 
 
“Canada and Switzerland continue to build our excellent relations,” said the Prime Minister.  “These two new agreements will increase both commercial and people-to-people links between our countries.”
 
The two agreements being announced today are:

• An Updated Air Transportation Agreement:  This new agreement will benefit passengers, airlines, airports and shippers in Canada and Switzerland by allowing more flight options and routings.  It modernizes an original agreement signed in 1975.
• An Updated Double Taxation Convention:  The amendments to the original 1997 Convention will further facilitate the exchange of tax information, assisting Canada’s tax authorities in administering and enforcing national tax laws and preventing international tax evasion.  It will also reduce tax barriers to bilateral trade and investment.

The two leaders also discussed bilateral relations, priorities at the Francophonie, the Canadian and Swiss economic situations, and the international economic and financial outlook, including Canada’s priorities for the upcoming G-20 Summit.
 


Backgrounder

NEW AGREEMENTS BETWEEN CANADA AND SWITZERLAND

Air Transportation Agreement

One of Canada’s top-20 international air travel markets, Switzerland is an important aviation partner for Canada.  In this context, Canada and Switzerland have successfully concluded negotiations toward an Open Skies-type air transportation agreement, which modernizes the 1975 agreement (last amended in 2002) to better reflect today’s market realities.
 
The agreement now contains expanded operating rights for airlines from Canada and Switzerland to operate air transportation between each other’s territory and third countries, in conjunction with scheduled passenger and/or all-cargo air services between the two countries.  It also enables airlines to adjust their prices with greater flexibility to meet current market conditions. 
 
Overall, the agreement provides more flexibility for airlines and airports to consider commercial opportunities, facilitates greater economic activity, strengthens ties with Switzerland and ultimately benefits passengers and shippers by allowing more flight options and routings (routes?). 
 

Protocol Amending the Canada-Switzerland Double Taxation Convention

The double taxation convention currently in force between Canada and Switzerland was signed on May 5, 1997.
 
New Protocol provisions related to the elimination of double taxation, such as exemption from the withholding of tax dividends paid to pension plans and interest payments between unrelated parties, are expected to further strengthen trade and economic links between the two countries.
 
The Protocol also implements the latest internationally agreed standard for the exchange of tax information, as developed by the Organisation for Economic Co-operation and Development, in order to enable Canadian tax authorities to obtain information relevant for the enforcement and administration of Canadian taxation laws and to assist them in preventing international tax evasion.  This supports Canada’s commitment as a G-20 member to promote the effective exchange of tax information and to protect its public finances and financial systems.
 
The Protocol will enter into force once both countries have completed their respective domestic implementation procedures and will apply, generally, for taxation years that begin on or after January 1 of the year following the Protocol’s entry into force.