The main changes from the existing DTA are summarized as below:

1. Withholding tax rate on dividends

Under the existing DTA, withholding tax rate on dividends is 10%.
Under the new DTA, for companies (other than partnerships) with a direct shareholding of at least 25%, the withholding tax rate is 5%. For other companies, the withholding tax rate is still 10%.

2. Withholding tax rate on royalties

Under the existing DTA, withholding tax rate on royalties is 10%. In the protocol to the existing DTA, an effective withholding tax rate of 6% is provided for royalties that are paid for the use of, or the right to use, any industrial, commercial or scientific equipment.

Under the new DTA, withholding tax rate on royalties is 9%.

3. Capital gains

Under the existing DTA, the capital gains are taxable in the country of which the shares being disposed of consists directly or indirectly principally from immovable property situated in that country.

Under the new DTA, capital gains arising from the disposal of shares may be taxed in the state where the company whose shares are being sold is resident, provided the recipient of the gain has held, directly or indirectly, an interest of at least 25% in the capital of that company at any time during the 12-month period preceding the disposal, or the company derives more than 50% of its value directly or indirectly from immovable property situated in the state of residence of the company whose shares are alienated.

4. Permanent establishment

Under the existing DTA, The time threshold for building site, construction, assembly or installation projects to be treated as a permanent establishment is 6 months and for the provision of services is 6 months within any 12- month period.
Under the new DTA, the time threshold for building site, construction, assembly or installation projects to be treated as a permanent establishment is increased to 12 months and for the provision of services is 183 days within any 12-month period.

5. Business tax and value added tax

Under the New Treaty, the international transport services provided by Swiss resident shipping companies and airlines will be exempt from Chinese business tax, or will be zero-rated under value added tax (VAT) in China and the input VAT attributable to such suppliers will be creditable to the same extent as it is to business enterprises resident in China. International transport services provided by Chinese resident shipping companies and airlines will be zero-rated under VAT in Switzerland and the input tax attributable to such suppliers will be creditable to the same extent as it is to business enterprises resident in Switzerland.