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In the financial sector, SIF is committed to ensuring that, within the framework of equivalence procedures, the EU takes account of both Switzerland's special position in contractual and economic terms and its efforts to achieve partial approximation of the relevant legal provisions. This should ensure that Swiss providers are offered the possibilities of equivalence procedures under objective and transparent conditions. In the tax area, the agreement between Switzerland and the EU on the automatic exchange of financial account information has been in force since 1 January 2017. Moreover, Switzerland and the EU member states signed a mutual understanding on business taxation in 2014. In this, Switzerland undertook to abolish five tax regimes, while the EU member states reaffirmed their intention to abolish any countermeasures taken. The tax regimes will be abolished as part of the TRAF tax reform on 1 January 2020.

In the financial sector

Numerous EU legislative acts in financial market law include provisions which regulate the relationship with third countries. These provisions regularly provide for market access and/or reduced prudential requirements if the third country has equivalent regulation (equivalence). In its report on financial market policy for a competitive Swiss financial centre, published in 2016, the Federal Council identified precisely these equivalence procedures as an important element for maintaining and improving market access for Swiss providers in the EU area. To this end, recognition of the equivalence of Swiss financial market regulation should be achieved with the EU where this makes economic sense.

In recent years, recognition of the equivalence of the Swiss legal framework has already been obtained from the EU, particularly in the following areas:

  • Recognition of Swiss central counterparty regulation (2015);
  • Recognition of the equivalence of Swiss rules for the solvency of insurance companies (2015);
  • Recognition of Swiss trading venues (2017): with the decision of the EU Commission of December 2017 on the recognition of Swiss trading venues (in accordance with Article 23 of Regulation (EU) No. 600/2014 of the European Parliament and Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No. 648/2012 (MiFIR]), EU investment firms can trade securities traded in the EU on Swiss stock exchanges until the end of 2018. The Federal Council underlined in a statement that Switzerland fulfils the conditions for recognition of stock market equivalence every bit as much as other third countries that have been granted indefinite recognition (press release).

SIF is particularly committed to the rapid initiation and conclusion of further equivalence procedures in the following areas:

  • Recognition of Swiss trading venues beyond 2018 (in accordance with Article 23 of the MiFIR);
  • Recognition of Swiss derivatives regulation (in accordance with Article 13 of Regulation (EU) No. 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories [EMIR]);
  • Extension of the EU passport for managers of alternative investment funds to third countries (in accordance with Article 67 of Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010 [AIFMD]);
  • Procedure for cross-border transactions with professional investors in accordance with Articles 46/47 of the MiFIR.

Among other things, the annual regulatory dialogue between the EU Commission and SIF provides an opportunity to take up this issue and to discuss the progress made in the equivalence procedures.

In the tax sector

On 14 October 2014, Switzerland and the 28 EU member states signed a joint statement on business taxation, thereby putting an end to a controversy which had put a strain on relations between Switzerland and the EU for a number of years. Switzerland undertook to abolish five controversial tax regimes, while the EU members states confirmed that they would lift any countermeasures taken against these regimes as soon as the regimes in question had been abolished.

In May 2019, voters approved the Federal Act on Tax Reform and AHV Financing (TRAF) with over 66% of votes in favour. With this law, Switzerland will abolish tax regimes no longer compatible with international standards as of 1 January 2020. The law introduces internationally accepted tax relief measures such as a patent box, thereby ensuring that Switzerland remains an attractive business location.

The economics and finance ministers of the EU member states acknowledged this progress and decided at their meeting on 10 October 2019 to remove Switzerland from their tax list. 

 

Further information

Last modification 14.10.2019

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