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Šemeta Welcomes Swiss Tax Progress

21 June 2013   (0 Comments)
Posted by: Author: Ulrika Lomas
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Author: Ulrika Lomas

Swiss Federal Councillor Eveline Widmer-Schlumpf has recently held talks with European Union (EU) Tax Commissioner Algirdas Šemeta, with the discussions focusing on unresolved tax issues.

In the area of business taxation, Switzerland reaffirmed its willingness to adjust certain tax regimes, provided that the EU dispenses with defensive measures against Switzerland and is fair.

Finance Minister Widmer-Schlumpf and EU Commissioner Šemeta noted that "substantial progress" has been made in the dialogue on business taxation. According to the EU, it will be possible to continue the dialogue in the second half of the year.

Šemeta and Widmer-Schlumpf also discussed the recently adopted mandate of the Council of Ministers regarding negotiations with third countries on extending the savings tax agreement, to close loopholes. Here, the Swiss Minister emphasized that Switzerland has been willing to discuss such an amendment of the agreement since 2009. She nevertheless underlined the need for the EU to maintain access to its markets for Swiss financial services.

Regarding the exchange of information, Widmer-Schlumpf reaffirmed that a global standard for the automatic exchange of information is necessary, stressing that the most suitable body for preparing this standard would be the broadly based Organisation for Economic Cooperation and Development (OECD).

Last month, the Swiss Federal Department of Finance (FDF) and Conference of Cantonal Finance Directors established the cornerstones of the Federal Council's planned reform of corporation tax, designed to strengthen the fiscal competitiveness of the Confederation, as well as to resolve the longstanding dispute between the Confederation and the EU.

The reform aims to ensure that the Swiss tax regime is accepted at international level, and will guarantee both legal security and budgetary balance. In return, Switzerland expects the EU and its member states to renounce plans to take unilateral action against the Confederation.

In its interim report, the FDF and cantonal steering group underlined the need for a number of existing provisions to be modified and for a raft of new fiscal measures to be introduced, to strengthen the attractiveness of the Swiss financial center.

The group advocated that tax incentives are introduced to promote research, development, and innovation activities, in line with attractive tax rates already accorded by rival financial centers. In tandem, the group suggested that the Swiss cantons could reduce the rate of tax levied on profits, to preserve their competitiveness.

The European Union has demanded that Switzerland abolish certain unfair cantonal tax regimes, granting favorable tax treatment to international companies headquartered in the Confederation, and carrying out their economic activities abroad.

The European Commission officially decided back in 2007 that the cantonal tax regimes in favor of holding, mixed and management companies are a form of state aid, and therefore incompatible with the proper functioning of the 1972 Agreement between the EU and Switzerland. The EU more recently stipulated that a solution is to be submitted for approval by the end of June 2013..


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