Switzerland Remaining Offshore From the EU

Summary: Switzerland and the European Commission are at loggerheads over Switzerland’s so called 'unfair' and distinctly advantageous tax policies

Despite the fact that Switzerland is geographically very much in Europe, landlocked and bordered as it is by Germany, Italy, France and Austria, recent governmental announcements relating to the continuance of preferential tax treatment available in Switzerland just proves that Switzerland is remaining offshore from the EU for the foreseeable future!

In announcements that are said to have angered the European Commission, both the Swiss Foreign Minister Micheline Calmy-Rey and senior Swiss diplomat Michael Ambuehl have stated that Switzerland will not give in to pressure from the European Union to change the cantonal system that allows different Swiss cantons to set their own tax rates with many offering attractive taxation incentives to draw international holding companies and high net worth individuals to relocate to Switzerland.

Jose Manuel Barroso, current head of the European Commission has been at loggerheads with Switzerland over what he sees as a discriminatory tax regime which goes against the internal market rules of the EU.  Switzerland on the other hand are quick to point out that not only are they not members of the European Union but that the cantonal tax system doesn’t even violate the 1972 free-trade agreement that was signed between Bern and Brussels that the European Commission keep bringing up.

According to both Micheline Calmy-Rey and Michael Ambuehl the position is clear, the 1972 free-trade agreement could only be violated if Switzerland were offering direct or even indirect subsidies to the exchange of goods…and they believe they are not.  Ms Calmy-Rey even went as far as saying in a recent newspaper interview that as far as she is concerned there is simply no basis for discussion on this point with the European Union.

Allowing Switzerland to remain offshore from the EU is however, not in the EU’s best interests.  While there remains a European located nation which is also an active EU partner which is in a position to offer significant taxation advantages to international companies and even individuals, that country will be violating one of the fundamentals upon which the European Union was founded – namely that one rule fits all – i.e., unfair competition is not allowed!  For Switzerland it is not at all clear whether they can and will continue to keep up their protests because the EU represents Switzerland’s most important partner when it comes to everything from trade to defence…but for the time being at least, Switzerland with its offshore banking and advantageous taxation regime remains an offshore jurisdiction of distinction!

SHARE: del.icio.us   Digg   Facebook   Google   Mixx   NewsVine   StumbleUpon   Technorati   YahooMyWeb