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Tax Plays No Part In Swiss-EU Agreement, Bern Insists

by Ulrika Lomas,, Brussels

05 February 2007

Switzerland has once again "strongly rejected" criticism from the European Union concerning the compatibility of certain aspects of the Swiss tax system with a trade agreement with the EU.

The issue of EU reservations about Switzerland's cantonal taxation regimes for certain types of companies was discussed last week at a meeting between State Secretary Michael Ambuhl and Eneko Landabaru, Head of the European Commission's General Directorate for External Relations, in Brussels.

Ambuhl strongly rejected the accusation that these taxation regimes represented a breach of the bilateral treaties between Bern and Brussels, and pointed out that there was no agreement between Switzerland and the EU that required Switzerland to bring its company taxation into line with that of EU member states.

"Consequently no violations of any agreements were possible," the Swiss foreign affairs department said.

Ambuhl said that a smoothly functioning partnership with Switzerland, the second most important export market for EU goods, was also in the interest of the Union, but like all states, Switzerland wished to offer an attractive business location with advantageous conditions. Company taxation was one factor but not the only reason for the attractiveness of Switzerland, he observed.

Talks between Ambuhl and Landabaru focused on the implementation of the bilateral agreements, a possible framework agreement, and international issues such as the Near and Middle East and Kosovo, and was part of regular Swiss contact with EU representatives.

The priorities included the renewal of the agreement on research cooperation, where good progress is supposedly being made. Ambuhl also said that it was in Switzerland's interest for the EU to ratify the Schengen/Dublin association agreements "as soon as possible". As a result of legal and technical reservations by the parliaments of individual member states this has not yet been possible.

A possible framework agreement was also discussed at the meeting. The purpose and the advantage of such an agreement would be to consolidate the bilateral route by improved coordination in the administration and the further development of the agreements. A platform for a more intensive political dialogue could also be created.

State Secretary Ambuhl welcomed the opening of a European Commission's Delegation in Bern, saying that a Brussels "aerial" in Switzerland would facilitate exchanges between the partners and would increase mutual understanding.

A comprehensive report in our Intelligence Report series examining offshore confidentiality is available in the Lowtax Library at and a description of the report can be seen at

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