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SUMMARY RESIDENT PERSON PREDOMINANT INTEREST TEST The ultimate beneficial owners are not qualified persons in the aggregate of a predominant interest in the form of participation or otherwise STOCK EXCHANGE TEST The principal class of shares is not listed or is not regularly and primarly traded on one or more recognized stock exchanges The ultimate beneficial owners of a predominant interest in the company are not one or more companies which meet the direct stock exchange test 95% SHAREHOLDER TEST 95% or more of all the shares (of the aggregate vote and value) are ultimately owned by seven or fewers persons that are qualified persons of a member state of the EU or of the EEA or a party to the NAFTA Less than 50% of the gross income is used to make deductible payments to persons which are neither qualified persons nor US citizens The company does not have outstanding a class of shares that entitles its holders to a portion of the income derived from USA that is larger than a portion such holders would receive in absent of such a class of shares The company that controls such a company has outstanding a class of shares that entitles its holder to a portion of the income derived from USA that is larger than the portion such holders would receive absent of such a class of shares 50% or more of the value (or vote, if relevant) of the previously mentioned class of shares is held by not qualified persons ACTIVE TRADE OR BUSINESS TEST The person is engaged in the active conduct of a trade or business in CH The income derived by this person from USA is derived in connection with the business activities carried on in CH The income is derived from a related party The trade or business of the income recipient is not substantial in relation to the income producing activity HEADQUARTER TEST The person receiving the income is a Swiss resident company and it is a recognized headquarters company for a multinational corporate group The headquarters company carries out a substantial part of the overall supervision and administration of a multinational group of companies and these activities are carried out in Switzerland The group consists of corporations which are residents of and are actively engaged in business activities carried on in at least five countries or five groups of countries Less than 10% of the group's gross income is derived from each of the five countries or five groups of countries; or more than 50% of the group's gross income is derived from any one country other than Switzerland; or more than 25% of the group's gross income is derived from USA The required ratios regarding the gross income are met when averaging the gross income of the preceding four years (i.e. less than 10% of the group's gross income is derived from each of the five countries or five groups of countries; or more than 50% of the group's gross income is derived from any one country other than Switzerland; or more than 25% of the group's gross income is derived from USA) The headquarters company has independent discretionary authority to carry out the headquarters functions (i.e. overall supervision and administration of a multinational group of companies) and the headquarters company exercises this authority The headquarters company is subject to generally applicable rules of taxation in Switzerland The income derived from USA is derived in connection with the group's business activities or it is incidental to the group's business activities TRIANGULAR CASES The Swiss resident company derives income from USA which is attributable to a permanent establishment in a third jurisdiction The total tax liability in CH and the third jurisdiction is 60% or more of the tax liability that would have been payable in CH, if the income was earned in CH by the company and were not attributable to the permanent establishment in the third jurisdiction Under these circumstances treaty protection is granted
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