Ministers talk tough to Berne while still trying to agree
By Tanguy Verhoosel in Luxembourg | Friday 22 June 2012
On 22 June, the 27 finance ministers agreed to give Switzerland more time, until the end of 2012, to accept and apply the “criteria and principles” of their code of conduct for business taxation. If no progress is made by then in the “dialogue” Berne has agreed to embark on, warned the ministers, the Union will adopt more coercive approaches to bring Switzerland into line.
This threat is found in the report on application of the code of conduct, which has already obliged the 27 to dismantle on their territory over 100 tax schemes encouraging the relocation of companies. The finance ministers adopted it without discussion. The threat is no doubt justified by the fact that the Swiss will probably not make many concessions before the Union eases up on its institutional demands. In Brussels, some are already denouncing unacceptable “blackmail”.
The Council report identifies other priority issues – the tax schemes in Guernsey (zero-10 corporate tax regime) and Gibraltar (Income Tax Act 2011), profit participating loans, etc – to be debated by the Council’s Code of Conduct Working Group under the Cyprus Presidency.
Also on 22 June, the finance ministers adopted without debate the Ecofin report to the European Council on tax questions, drafted by Copenhagen (see
On 2 March, the 27 heads of state and government invited the Council and Commission “to rapidly develop concrete ways to improve the fight against tax fraud and tax evasion, including in relation to third countries, and to report by June 2012”. They added that “work and discussions should be carried forward on the Commission proposals on energy taxation, on the common consolidated corporate tax base [CCCTB], on the financial transactions tax and on revision of the Savings Tax Directive. The negotiating directives for savings taxation agreements with third countries should be rapidly adopted”.
The Ecofin Council report establishes the failure to achieve these different aims.
The report notes that “at this stage it has not been possible to reach agreement” on savings taxation (Luxembourg and Austria are opposed). In addition, “a number of member states maintain substantive objections” to establishment of the CCCTB (work will continue “at technical level”). It also seems increasingly obvious that breaking the impasse on the FTT will probably require enhanced cooperation. Germany and Austria have sent letters calling for it, moreover. There will be a policy debate on the subject, on 22 June.
Switzerland has until the end of 2012 to accept and apply the “criteria and principles” of the EU’s code of conduct for business taxation