The Swiss Government has recommended that Parliament approve a law ratifying the new double tax agreement signed with Zimbabwe. While the cantons (administrative divisions in the European country) and relevant business associations have already welcomed the conclusion of the deal, Parliament must now endorse the legislation for the ratification of the agreement to enable it to enter into force.
The agreement provides that the maximum rate of withholding tax on dividend income at source will be capped at 5% where the recipient holds at least 25% of the capital of the company paying the dividends for a period of 365 days, including the dividend payment date. Otherwise, the withholding tax will be capped at 15%. For interest and royalties income, the agreement caps withholding tax at source at 7.5%. Finally, for technical services fees, the withholding tax rate will be capped at 2.5%.
The agreement includes provisions to counter tax base erosion and profit shifting. Specifically, it includes a preamble stating that the DTA is not intended to create opportunities for non-taxation or reduced taxation through tax evasion or avoidance, or treaty shopping. Further, the pact has provisions to counter treaty abuse, prevent the artificial avoidance of permanent establishment status, neutralise the effects of hybrid mismatch arrangements, and improve dispute resolution mechanisms.
The agreement will become effective after the completion of domestic ratification procedures by both nations.
Meanwhile, Switzerland’s State Secretariat for Economic Affairs (SECO) will contribute four million Swiss francs for the 2025-2029 period to support the United Nations Conference on Trade and Development (UNCTAD)’s E-commerce and the Digital Economy Programme, enabling the programme to carry out cutting-edge research, technical cooperation, and build intergovernmental consensus.
The contribution agreement was announced by SECO Head of Trade Promotion Monica Rubiolo and UNCTAD Secretary-General Rebeca Grynspan on 21 October, at the 16th session of the United Nations Conference on Trade and Development (UNCTAD16), which Switzerland hosted from 20 to 23 October 2025 at the Palais des Nations in Geneva.