EU disappointed tax reform rejected by Swiss voters

8 years ago - Published in Finance, Fundamental Analysis

The EU is “very disappointed” in the Swiss people’s rejection of the government’s corporate tax reform plan, the EU’s tax commissioner MOscovici said on Monday.

Voters on Sunday blocked the tax system revamp, sending the Swiss government back to the drawing board as it tries to abolish ultra-low tax rates for multinationals without triggering a mass exodus by those companies. "The Commission is very disappointed by the results of a referendum in Switzerland," Moscovici told a news conference.

"The rejection of the reform and referendum means we need to redouble our efforts when it comes to taxation. The Commission plans to consult the member states so we can decide together how to proceed," he said.
 
The Organisation for Economic Cooperation and Development (OECD) has criticized Switzerland's “harmful” current tax system for offering lower tax rates for foreign companies than for domestic ones.
But Ueli Maurer, finance minister, has already warned Switzerland will no longer fulfil its promise to international partners that it would abolish corporate tax privileges by 2019.

 
With the reform rejected, the government now fears Switzerland could be blacklisted as a tax haven, though the tax chief of the OECD on Monday denied to Swiss media there was any such list. 
 
“Thanks to our joint efforts, Switzerland has turned the page, becoming a constructive international partner in the fight against tax evasion and fraud,” said Moscovici. 
 
“In 2014 member states and Switzerland agreed to bring to an end harmful tax practices and Switzerland agreed to respect international rules set by the OECD”.

Cantons such as Geneva, Vaud and Basel have proposed cutting their headline tax rates after Switzerland bowed to EU pressure to adopt international standards and scrap preferential fiscal regimes that attracted thousands of multinationals. Geneva plans to lower its corporate tax rate to 13.49 percent from 24.2 percent, but is relying on federal funds to plug part of its 440 million-franc ($440 million) revenue gap.