The European Commission has called tax breaks given to companies by Switzerland to locate their corporate offices there are “unfair” due to the discrimination they make between foreign and domestic sources of income. By giving companies tax breaks on profits they make from EU customers, the Commission says, Switzerland upsets the “level playing field” that is required for continued trade relations between the EU and Switzerland. Switzerland replied that there was no foundation to the argument, and pointed out that there are no rules to break concerning tax arrangements because no regulations between it and the European Union exist.

Swiss law lets individual cantons give full or partial tax exemptions to companies on profits they generate outside Switzerland. Among the companies that have chosen to locate their European headquarters in Zurich are Kraft, Google, and IBM.

Switzerland is not a member of the EU, but it has assented to most EU trade rules for which the EU has granted access to customers in its member nations. The position of the Commission is that because Switzerland reaps the benefits of privileged access to EU markets, it should face the responsibilities that go along with such access. The Commission has not said what measures it would - or could - take against Switzerland if no agreement is reached on the issue.

Tags: European Union News //