How do Swiss double taxation agreements (DBA/CDI) protect against being taxed twice?

Switzerland has signed double taxation agreements (DBA in German, CDI in French) with more than 100 countries. These treaties allocate taxing rights between Switzerland and the partner country so that the same income is not taxed in full by both. Each treaty is bilateral and covers specific income types: employment income, dividends, interest, royalties, capital gains on real estate, pension income, and director fees.

The most common mechanisms are the exemption method and the credit method. Under the exemption method, income taxed in the source country is excluded from the residence country's tax base entirely. Under the credit method, both countries can tax the income, but the residence country gives a credit for foreign tax paid. Switzerland generally uses the exemption method for employment income and the credit method for investment income.

To benefit from a reduced treaty rate (for example, a 15% withholding rate on dividends instead of the domestic 35% Verrechnungssteuer), a Swiss recipient must apply for treaty relief actively — it is not automatic. Similarly, Swiss residents who earn foreign-source income need to report it on their Swiss tax return and claim the applicable treaty protection to avoid double taxation. The FTA maintains the full list of treaties and their rates online.

This is general information only, not professional tax advice. Consult a qualified tax professional for your specific situation.