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TAXATION : UNION AND SWITZERLAND HALF FILL THE PEACE PIPE.

In a draft joint declaration, they agree on certain principles for business taxation

The member states' working group responsible for managing the EU code of conduct on business taxation began reviewing, on 18 March, a new draft declaration between Switzerland and the EU meant to end a long controversy. An earlier version of the document was rejected by the member states in November 2013.

The text confirms the Swiss government's determination to "take measures" to abolish five tax schemes, three at canton level (holding companies, administrative companies and mixed undertakings) and two others at federal level (principal structures and finance branches). The EU claims that they distort competition in Europe. The text was drafted by Berne and the Commission.

The decision represents the most visible part of a set of "principles" and "political intentions" that Switzerland and the Union plan to translate into action, working together, in order to create a level playing field in the area of business taxation.

The draft does not include a timeframe for dismantling the five Swiss schemes, however.

This is Berne's way of responding to the EU's rejection of one of its demands. It had sought a commitment by the Union not to introduce any new counter-measures targeting the five schemes for the duration of the very long Swiss legislative process.

The new draft declaration states only that the member states will abolish the sanctions they have implemented once Switzerland has "effectively" dismantled the disputed schemes.

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Publication:European Report
Date:Mar 19, 2014
Words:242
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