The amending protocol to the 2002 income and capital tax treaty between Iran and Switzerland entered into force on 20 February 2023. The protocol, signed 3 June 2019, is the first to amend the treaty and includes the following changes:

• The preamble is replaced in line with BEPS standards;
• Article 3 (General definitions) is amended in respect of the meaning of competent authority for Switzerland, which is the Head of the Federal Department of Finance or his authorized representative;
• Article 7 (Business profits) is amended with the addition of the provision that "A Contracting State shall make no adjustment to the profits that are attributable to a permanent establishment of an enterprise of one of the Contracting States after 5 years from the end of the taxable year in which the profits would have been attributable to the permanent establishment. The provisions of this paragraph shall not apply in the case of fraud, gross negligence or willful default.";
• Article 9 (Associated enterprises) is amended with the addition of the provision that "A Contracting State shall not include in the profits of an enterprise, and tax accordingly, profits that would have accrued to the enterprise but by reason of the conditions referred to in paragraph 1 have not so accrued, after 5 years from the end of the taxable year in which the profits would have accrued to the enterprise. The provisions of this paragraph shall not apply in the case of fraud, gross negligence or willful default.";
• Article 25 (Mutual agreement procedure) is amended with the addition of the provision that "Any agreement reached shall be implemented notwithstanding any time limits in the domestic law of the Contracting States, but in any case not later than ten years after the end of the concerned taxable year.";
• Article 26 (Exchange of information) is replaced in line with the OECD standards for information exchange;
• A new Article 28 (Entitlement to benefits) is added, providing that a benefit under the treaty shall not be granted in respect of an item of income or capital if it is reasonable to conclude, having regard to all relevant facts and circumstances, that obtaining that benefit was one of the principal purposes of any arrangement or transaction that resulted directly or indirectly in that benefit, unless it is established that granting that benefit in these circumstances would be in accordance with the object and purpose of the relevant provisions of the treaty; and
• The final protocol initially signed with the treaty is amended with the addition of provisions regarding the exchange of information upon request.

The protocol generally applies from 1 January 2024 in Switzerland and from 21 March 2024 in Iran (first day of Farvardin in Iranian calendar).