Switzerland to Recognize EU Tax Code of Conduct
The business taxation dialogue between Switzerland and the EU is thus nearing completion: during the meeting on June 20, 2014, the Federal Council gave the “go-ahead” for the beginning of a mutual agreement between Switzerland and the EU on business taxation.
The deal follows the adaptation of the “Tax Policy Coordination”, a report by the EU finance minister, with its key recommendation that a total of five "harmful" measures may be disassembled. These include in particular cantonal tax regimes, which the European Commission said in 2007 were seen to be distorting competition in Europe due to the differing treatment of domestic and foreign income. According to the “Code of Conduct” 's 2011 work plan, other concerns raised are thought to be about ringfenced tax regimes, and the treatment of multinationals headquartered in Switzerland, and branches of multinationals located in Switzerland.
After two years of discussion on business taxation Switzerland has now managed with the European Commission to reach a mutual understanding, which contains no state treaty obligations and is limited to the listening of principles and mutual intentions. Switzerland will remain actively involved on efforts to develop international standards for company within the OECD (Organization for Economic Cooperation and Development).