Vorlage

2. Without prejudice to the application of domestic or agreement-based provisions for the prevention of fraud or abuse in Switzerland and in Member States, interest and royalty payments made between associated companies or their permanent establishments shall not be subject to taxation in the source State where:

- such companies are affiliated by a direct minimum holding of 25 % for at least two

years or are both held by a third company which has directly a minimum holding of 25 % both in the capital of the first company and in the capital of the second

company for at least two years, and;

- one company is resident for tax purposes or a permanent establishment is located in a

Member State and the other company is resident for tax purposes or other permanent establishment situated in Switzerland, and;

- under any double tax agreements with any third States none of the companies is resident

for tax purposes in that third State and none of the permanent establishments is situated in that third State, and;

- all companies are subject to corporation tax without being exempted in particular on

interest and royalty payments and each adopts the form of a limited company⁴.

⁴With regard to Switzerland, the term "limited company" covers:

- société anonyme/Aktiengesellschaft/società anonima;

- société à responsabilité limitée/Gesellschaft mit beschränkter Haftung/società a

responsabilità limitata;

- société en commandite par actions/Kommanditaktiengesellschaft/società in accomandita per azioni.

AMP/EU/CH/en 21