Business taxation: Switzerland and EU initial mutual understanding to end talks
Bern, 01.07.2014 - Today in Bern, the heads of delegation of Switzerland and the European Union (EU) initialled a mutual understanding on business taxation. State Secretary Jacques de Watteville and his EU counterpart Heinz Zourek, Director General of the European Commission's Taxation and Customs Union Directorate-General, agreed on its final wording. The understanding brings an end to a dispute that has strained relations between the two parties for almost a decade.
On 20 June 2014, the Federal Council and the EU's Council of Economic and Finance Ministers (Ecofin) announced that they had managed to find common ground on the issue of business taxation. The text initialled today corresponds to the understanding reached in this context and brings an end to a bilateral dispute which has resulted in friction and threats of severe countermeasures from the EU since 2005.
The Federal Council reaffirms its intention to propose abolishing certain tax regimes within the framework of the third series of corporate tax reforms, particularly those that provide for different treatment of domestic and foreign revenue ("ring-fencing"). New tax measures will be based on international standards. In return, the EU member states confirm their intention to lift any corresponding countermeasures taken as soon as the regimes in question have been abolished.
The relevant parliamentary committees and the cantons will be informed accordingly. The Federal Council will decide on the signing of the understanding thereafter. Parallel to this, Switzerland will remain actively involved in efforts to develop international standards for business taxation within the Organisation for Economic Co-operation and Development (OECD).
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Mario Tuor, Head of Communications, State Secretariat for International Financial Matters (SIF); + 41 58 462 46 16; email@example.com