EU calls for rapid start to tax talks

The European Union is calling for negotiations with Switzerland to begin as early as January over the varying corporate taxation rates in the 26 cantons.

This content was published on December 19, 2011 minutes and agencies

A meeting of EU finance ministers on Monday adopted a report which stipulates that the purpose of talks with third parties, including Switzerland, is for those countries to incorporate the principles and “all the criteria” of the EU Code of Conduct for Business Taxation.

The decision came without warning. Just three weeks ago EU ministers had been unable to agree on how to proceed with negotiations with Switzerland, which maintains it is not bound by the Code of Conduct rules as it is not a member of the EU.

In 2007, the EU Commission declared that some of Switzerland’s cantonal company tax practices were not compatible with the Free Trade Agreement and in 2010 it asked Switzerland whether it would be willing to follow the principles of the Code of Conduct.

The EU sees its Code of Conduct as a means of identifying and eradication “harmful tax practices”.

EU sources told the Swiss News Agency “a concrete dialogue” could be opened as early as January now that member states had reached an agreement on how to proceed.

The Swiss government has expressed willingness to engage in discussions about harmful corporate tax practices, but wants limited discussions in order to accommodate the cantons which will be the first to suffer from changed corporate tax regimes.

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