The Swiss Government has recommended that parliament approve a law ratifying the new double tax agreement signed with Zimbabwe.

The Federal Council adopted a dispatch on the DTA at its meeting on November 5, 2025. The cantons and relevant business associations have already welcomed the conclusion of the deal, but parliament must now endorse legislation on the ratification of the agreement to enable it to enter into force.

The agreement provides that the maximum rate of withholding tax that will be charged on dividends income at source will be capped at five percent where the recipient holds at least 25 percent of the capital of the company paying the dividends for a period of 365 days including the dividend payment date. Otherwise, withholding tax will be capped at 15 percent.

For interest and royalties income, the agreement caps withholding tax at source at 7.5 percent. Finally, for technical services fees, the withholding tax rate will be capped at 2.5 percent.

The agreement includes provisions to counter tax base erosion and profit shifting. Specifically, it includes a preamble that states 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 agreement includes provisions to counter treaty abuse, prevent the artificial avoidance of permanent establishment status, neutralize 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.

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