European Union (EU) foreign affairs ministers are due to adopt a report on bilateral relations between Switzerland and the EU, proposing notably to abolish the various tax regimes applied by the Swiss cantons.
Ministers are reportedly concerned that certain cantonal tax regimes benefit holding companies and therefore create simply unacceptable distortions of competition. Alluding to the measures as ‘state aid’, ministers have called for the abolition of the cantonal regimes.
In their report, EU ministers have also denounced specific fiscal measures that the Confederation plans to introduce as part of its new regional policy, warning that these too could lead to distortions of competition. Switzerland aims to accord fiscal exemptions to companies electing to set up in certain outlying areas.
Insisting on the importance of greater cooperation from Switzerland in terms of the fight against tax fraud and evasion, ministers have urged Switzerland to implement in a swift and coherent manner the Organization for Economic Cooperation and Development’s (OECD) standards on the exchange of banking information between tax administrations, in its relationship with the EU and with all EU member states.
In December last year, EU finance ministers called on the European Commission to pursue negotiations with Switzerland in a bid to convince the Confederation to apply the 'code of good conduct' in the area of corporate taxation, adopted by the EU back in 1997.
Endorsed by ministers on December 10, the document is expected to be approved on December 14.
The European Commission considers certain cantonal company tax arrangements to be incompatible with the 1972 Free Trade Agreement - a notion that the Swiss government firmly rejects. A series of talks between Commission officials and the Swiss federal government fizzled out in 2007/20082007/2008 begin_of_the_skype_highlighting
, with both sides effectively agreeing to disagree on the main points at issue. However, the breakdown in talks reinforced Switzerland's view that it has no case to answer with regards the compatibility of its tax system with EU law, and after a November 2007 the Federal Department of Finance stated that "Switzerland rejects negotiations with the EU."
Switzerland is, of course, a sovereign state, and as a non-member of the EU, perfectly entitled to establish its tax regime as it sees fit, no matter how hard the Brussels bureaucrats huff and puff.
Ministers are reportedly concerned that certain cantonal tax regimes benefit holding companies and therefore create simply unacceptable distortions of competition. Alluding to the measures as ‘state aid’, ministers have called for the abolition of the cantonal regimes.
In their report, EU ministers have also denounced specific fiscal measures that the Confederation plans to introduce as part of its new regional policy, warning that these too could lead to distortions of competition. Switzerland aims to accord fiscal exemptions to companies electing to set up in certain outlying areas.
Insisting on the importance of greater cooperation from Switzerland in terms of the fight against tax fraud and evasion, ministers have urged Switzerland to implement in a swift and coherent manner the Organization for Economic Cooperation and Development’s (OECD) standards on the exchange of banking information between tax administrations, in its relationship with the EU and with all EU member states.
In December last year, EU finance ministers called on the European Commission to pursue negotiations with Switzerland in a bid to convince the Confederation to apply the 'code of good conduct' in the area of corporate taxation, adopted by the EU back in 1997.
Endorsed by ministers on December 10, the document is expected to be approved on December 14.
The European Commission considers certain cantonal company tax arrangements to be incompatible with the 1972 Free Trade Agreement - a notion that the Swiss government firmly rejects. A series of talks between Commission officials and the Swiss federal government fizzled out in 2007/20082007/2008 begin_of_the_skype_highlighting
, with both sides effectively agreeing to disagree on the main points at issue. However, the breakdown in talks reinforced Switzerland's view that it has no case to answer with regards the compatibility of its tax system with EU law, and after a November 2007 the Federal Department of Finance stated that "Switzerland rejects negotiations with the EU."
Switzerland is, of course, a sovereign state, and as a non-member of the EU, perfectly entitled to establish its tax regime as it sees fit, no matter how hard the Brussels bureaucrats huff and puff.
