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Saturday 3 November 2012

Turkmenistan, Switzerland Sign Double Taxation Agreement


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BERN (Swiss Federal Department of Foreign Affairs) – Turkmenistan and Switzerland have recently held talks in Bern, with the discussions focussing on plans to amplify bilateral economic relations between the two countries, and concluding in the signing of a double taxation agreement (DTA).

Avoidance of international double taxation (PDF)
Double taxation refers to the same transaction, asset or income source which is simultaneously subject to tax by the authorities of two countries. This situation can arise in the case of individuals domiciled in various countries or companies with branches in different countries, or in the case of income from another country. The aim of DTAs is to overcome obstacles for cross-border economic transactions. DTAs also govern administrative assistance in tax matters. Due to the globalisation of financial markets and the financial crisis, the importance of international cooperation has also increased greatly in the area of tax matters. In March 2009, the Swiss Federal Council therefore decided to extend administrative assistance in tax matters and to include the corresponding Article 26 of the OECD Model Convention when negotiating new double taxation agreements, as well as to revise existing DTAs accordingly.

President of the Swiss Confederation Eveline Widmer-Schlumpf received the Turkmen President Gurbanguly Berdimuhamedov for an official visit in Lohn mansion in Kehrsatz near Bern on 8 October 2012. Several members of the Turkmen government as well as Federal Councillor Johann Schneider-Ammann, head of the Federal Department of Economic Affairs (FDEA), took part in the talks, which focused on bilateral relations, multilateral cooperation and various regional topics.

The main agenda items were bilateral relations and cooperation in multilateral bodies. Turkmenistan is a member of Switzerland’s constituency (i.e. voting group) in the Bretton-Woods Institutions (IMF and World Bank), in the European Bank for Reconstruction and Development (EBRD) and the Global Environment Facility (GEF). Both sides stressed their wish to intensify bilateral relations, especially in the economic field.

Following the talks, four agreements were signed: a double taxation agreement, a Memorandum of Understanding between the two foreign ministries, a Memorandum of Understanding between the Geneva Centre for Security Policy and the Institute of International Relations of the Foreign Ministry of Turkmenistan and the Memorandum of Understanding between the Chamber of Commerce Switzerland – Russia/CIS and the Turkmenistan chamber of industry.

Switzerland and Turkmenistan have gradually strengthened and deepened their relations in recent years. This was the first official visit to Switzerland by a Turkmen president. Apart from business representatives and members of the civil service, the Turkmen delegation included Foreign Minister Rashid Meredov, Foreign Trade Minister Bayar Abayev and the head of the Central Bank Tuvakmammet Japarov.

After the official talks, the Turkmen delegation met the President of the National Council Hansjörg Walter in the Palais Federal.

Switzerland had previously signed and got approval from its parliament a DTA with Kazakhstan.

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