Switzerland has acknowledged the fact that European Union will remove the country from its grey list for tax havens following a reform of the corporate tax system.
“Switzerland meets and implements international tax standards. The European Union has acknowledged this…” said a statement,external link released by the State Secretariat for International Finance (SIF), on Thursday.
The country, which is a major EU economic partner, had been placed on a grey list in December 2017. The list includes nations that have committed to change their tax rules to make them compliant with EU standards.
“It’s a success for me if Switzerland comes off this list. The best list is a short one,” said Pierre Moscovici, European Commissioner for Economic and Financial Affairs, at a press conference afterwards.
The EU acknowledged that a tax reform passed last May – and due to be in force from 2020 – was sufficient to meet its demands.
This was also highlighted in the Swiss statement. “With this law, Switzerland will abolish tax regimes no longer compatible with international standards as of 1 January 2020. The law introduces internationally accepted tax relief measures such as a patent box, thereby ensuring that Switzerland remains an attractive business location,” it said.
The 28-nation EU set up a blacklist and a grey list of tax havens two years ago after revelations of widespread avoidance schemes used by corporations and wealthy individuals to lower their tax bills. The lists are regularly reviewed to take account of overhauls or to add new jurisdictions.
The EU placed Switzerland on the grey listexternal link in December 2017. There had been fears that Switzerland would be black-listed after voters rejected an initial proposal for a corporate tax reform. Voters believed the new regime would unfairly benefit big companies at the expense of smaller firms and individuals.
Not everybody has welcomed the EU’s move. “The EU has whitewashed two of the world’s most harmful tax havens,” Chiara Putaturo of Oxfam, an anti-poverty group, said in reference to the decision of delisting Switzerland and Mauritius.
“Despite recent reforms, both countries will continue to offer sweet treats to tax-dodging companies,” she told Reuters.
The Organisation for Economic Co-operation and Development is also planning reforms of tax rulesexternal link that target multinationals which could affect Switzerland.