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Switzerland Agrees Tax Regime Review With EU

by Ulrika Lomas,, Brussels

03 July 2014

Representatives of the European Union and Switzerland have initialed a mutual understanding on business taxation, bringing to an end a dispute that has strained relations for almost a decade.

In the document, the Swiss Federal Council reaffirms its intention to propose removing certain tax regimes, deemed by the EU to be "harmful." In particular, it is to tackle systems that provide for the different treatment of domestic and foreign revenue. Any new tax measures will be based on international standards.

In return, the EU has pledged to remove corresponding countermeasures as soon as the regimes in question have been abolished.

Last month, the Federal Council and the EU's Council of Economic and Finance Ministers (ECOFIN) announced that they had found common ground on the issue. The freshly initialled text corresponds to the understanding reached on June 20. The Swiss State Secretary Jacques de Watteville and his EU counterpart Heinz Zourek, Director General of the European Commission's Taxation and Customs Union Directorate-General, have now agreed on its final wording.

The Federal Council will now inform the relevant parliamentary committees and cantons, and will decide a date for the formal signing of the understanding. It has already received approval from the EU's Federal and Economic and Financial Affairs Council.

De Watteville told reporters: "We have buried the hatchet after nine years of difficult negotiations with the EU and have created legal certainty."

TAGS: compliance | Finance | tax | business | European Commission | tax compliance | tax avoidance | tax incentives | corporation tax | tax planning | tax rates | Switzerland | tax breaks | tax reform | standards | European Union (EU) | Europe | Tax | Tax Evasion

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