Double taxation deductions with foreign countries

What is double taxation?

There is an income tax on the one hand and a withholding tax on the other.

Income tax is paid at the place of your tax residence, i.e. where you file your tax return. If a member or a principal receives copyright royalties from SUISA, income tax is levied on this type of income.

Withholding tax is withheld or deducted directly at the source of the payment. It is a tax on income such as interest, dividends and royalties, and therefore remuneration for copyright is included. If a foreign sister society collects money for a SUISA member and forwards this income to SUISA, a withholding tax may already be levied on this income at source, in this case at the foreign collecting society, and forwarded to the tax authorities of the respective country.

If both the income tax at the tax residence and the withholding tax abroad are levied on the copyright royalties, a case of double taxation exists.

There are very different rules as to how, or if at all, withholding tax applies to the cross-border payment of copyright royalties by collecting societies. These regulations are not made by the collecting societies, but are issued by the tax authorities of the respective countries. In order to minimise or completely prevent such double taxation, most countries conclude so-called double taxation agreements among themselves.

On the overview you can see if a withholding tax is deducted and if so how much it is per country, in other words what the foreign collecting society will deduct directly from your distributions and settlements in case there is a withholding tax: Overview Double taxation deductions in SUISAs Foreign Distributions 2022

How do I proceed in case of double taxation?

The case of double taxation is a complex matter. The regulations vary greatly from country to country. In addition, there are confusing exemption rules: For example, individual countries make a distinction as to whether the recipient of copyright remuneration from SUISA has their residence in Switzerland (“resident”) or their residence abroad (“non-resident”) and provide for different tax rates for this.

We therefore recommend that SUISA members and clients contact a tax expert. Your tax authority may also be able to help you. Another option is to check the website of the Federal Tax Administration: International tax law by country

Under certain circumstances, the withholding tax may be partially or fully reclaimed from the foreign tax authority. Depending on the country, the procedure varies. Reclaiming tax is often done by having to fill out a form. Withholding tax refund forms can be found at: Forms for the refund of foreign tax at source