Switzerland – EU tax dialogue

Switzerland and the EU member states signed an understanding on business taxation in 2014 as a result of the tax dialogue started in 2012. In this understanding, Switzerland undertook to abolish five Swiss tax regimes, while the EU member states confirmed that they would lift any countermeasures as soon as the regimes in question had been abolished. The regimes are to be abolished within the scope of tax proposal 17.

Back in 2007, the European Commission criticised certain cantonal tax practices as constituting illegal state aid. In June 2010, the EU proposed establishing a dialogue with Switzerland on its code of conduct for business taxation. The Federal Council adopted a mandate concerning this dialogue on 4 July 2012. This dialogue aimed to find an internationally accepted solution which would increase the competitiveness of Switzerland as a business location while taking account of the budgetary situation of the Confederation and the cantons.

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 tax regimes (domiciliary, mixed and holding companies, the FTA circular no. 8 concerning principal companies and the FTA's practice concerning the Swiss finance branch), 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. The new tax measures will be based on OECD international standards.

The third series of corporate tax reforms (CTR III), rejected by voters in the referendum on 12 February 2017, made provision for the abolition of these regimes. Tax proposal 17 maintains this objective.

Last modification 09.10.2017

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