On 21 March 2006Swizerland and Austria signed a protocol to the income and capital tax treaty of 30 January 1974. Once in force, the protocol will, subject to certain exceptions, apply retroactively from 1 January 2006. If the new rules are of disadvantage to the legal position of taxpayers and, therefore, result in a higher tax liability, the effective date of the protocol will be 1 January 2007. The changes made by the protocol to the 1974 treaty are summarized below. Royalties Under the 1974 treaty, royalties are liable to a withholding tax of 5% and, subject to certain conditions,...