Saturday

1st Oct 2016

EU commissioner blasts bilateral tax deals with Switzerland

  • Swiss francs have gone up in value during the euro-crisis (Photo: Marcel Grieder)

Member states should "refrain" from bilateral deals on taxing Swiss bank accounts held by their nationals, EU taxation commissioner Algirdas Semeta on Monday (5 March) wrote in a letter to the Danish EU presidency.

The letter, seen by EUobserver, was prompted by the recent signature by Germany and the UK of bilateral agreements with Switzerland in the area of taxation and financial markets.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

"While member states are free to enter into international agreements, be they bilateral or multilateral, such agreements must not include any aspects which overlap with areas in which common action by the European Union has been taken or is envisaged," Semeta wrote.

A long-delayed revision of an EU savings law, which is still being blocked by Austria and Luxembourg, would widen disclosure requirements to bank accounts held by EU nationals abroad - for instance German and British nationals not paying taxes back home on their Swiss accounts.

"In this context, member states should refrain from negotiating, initiating, signing or ratifying agreements with Switzerland, or any other third state, insofar as any aspects regulated at EU level might be touched upon," the letter reads.

Germany and the UK have since agreed to re-negotiate the agreements and remove these provisions, but Bern has threatened to block other EU-Swiss agreements under way in retaliation. Switzerland is thought to view bilateral tax deals easier than having to deal a potentially more demanding EU pact.

Speaking at a press conference in Brussels on Monday, Semeta said he was "always in favour of a constructive approach in negotiations and I trust this will be the case."

"We have our reading of the agreements which says very clearly they have to be changed and that is what Germany and the UK are ready to do. It is up to Switzerland to decide what they will do, but I do not think we should take hostage other agreements currently being negotiated."

The commissioner, who wants to prevent other countries taking the London and Berlin route, also noted that over €1 trillion are lost yearly in the EU due to tax evasion and fraud, "a lot" given the current economic crisis. By unblocking the EU savings law, member states would be able to boost their revenues and make less painful cuts in the wages or pensions sector, he said.

Semeta's stance is backed by one of the key MEPs dealing with this dossier, British Liberal MEP Sharon Bowles who chairs the economics committee.

"When I first heard the proposal by Angela Merkel (on the bilateral agreement with Switzerland), my reaction was 'oh no' and it has not changed since," she said during the same press conference.

She insisted that bilateral deals can never be better than EU-wide agreements and said all member states should benefit from transparency and disclosure rules with Switzerland. "I believe in the supremacy of the community method," she said.

This article was corrected on 6 March to say that over €1 trillion are lost yearly due to tax evasion and fraud, not €3 trillion as it previously stated.

New EU rules on financial products in limbo

A feud between MEPs and the EU commission is threatening to derail financial services regulation that would protect consumers from misleading investment products.

Stakeholders' Highlights

  1. EFAEFA Supports a YES Vote in the Hungarian Referendum
  2. ACCAFinTech Boom Needs Strong Guidance to Navigate Regulatory Hurdles
  3. Counter BalanceWhy the Investment Plan for Europe Does not Drive the Sustainable Energy Transition
  4. Nordic Council of MinistersThe Nordic Region Seeks to Make Its Voice Heard in the World
  5. Taipei EU OfficeCountries Voice Support for Taiwan's Participation in ICAO
  6. World VisionNew Tool Measuring Government Efforts to Protect Children Released
  7. GoogleDid You Know Europe's Largest Dinosaur Gallery Is in Brussels? Check It Out Now
  8. IPHRHuman Rights in Uzbekistan After Karimov - Joint Statement
  9. CISPECloud Infrastructure Providers Unveil Data Protection Code of Conduct
  10. EFAMessages of Hope From the Basque Country and Galicia
  11. Access NowDigital Rights Heroes and Villains. See Who Protects Your Rights, Who Wants to Take Them Away
  12. EJCAppalled by Recommendation to Remove Hamas From EU Terrorism Watch List