Switzerland Receives Ultimatum from European Tax Commissioner

Algirdas Semeta, the European Union Tax Commissioner, has openly criticized Switzerland for its tax laws which favor foreign companies. Mr. Semeta warned that the country could be placed on a “black list” of jurisdictions if changes are not made.

The Tax Commissioner argues that the EU code of conduct requires that there be no preferential treatment for foreign companies in comparison to domestic companies, but that Switzerland’s policies do just that.

One of the measures Mr. Semeta is pushing for is an automatic exchange in information, similar to the FATCA agreement Switzerland has recently agreed to in order to comply with US regulations.

Switzerland has resisted this type of information exchange, and prefers to keep bilateral agreements such as the one it has with the UK which allows the foreign government to collect taxes without disclosing the identity of the account holder in Switzerland.

Although Switzerland is not a member of the EU, the European Commission still strives to amend or abolish harmful tax practices in its efforts to level the playing field, and in an interview with Le Temps, the Commissioner specifically warns Switzerland that failure to make progress in the area of corporate taxation by June 2013 will result in the country’s blacklisting.

The warning by Mr. Semeta has been criticized by Swiss authorities. The Swiss Finance Minister has stated that Switzerland is engaged in constructive dialogue with the EU and has put forward proposals for discussion.

Source: worldradio.ch.