Wednesday

22nd Mar 2023

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.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

"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.

France threatens Switzerland on tax evasion

French leader Nicolas Sarkozy has promised to make Switzerland into an international pariah unless it stops helping EU tax payers hide money. But EU countries have a poor track record of cracking down on high-level cheats.

'Final warning' to act on climate change, warns IPCC

The United Nations's report — synthesising years of climate, biodiversity, and nature research — paints a picture of the effects of global warming on the natural world, concluding there is "no time for inaction and delays."

EU launches critical raw materials act

The EU presented its strategy to ensure access to critical raw materials needed for clean technologies. No country should supply more than 65 percent of any key material. Currently, China dominates almost all rare earth metal markets.

Latest News

  1. EU Parliament joins court case against Hungary's anti-LGBTI law
  2. Three French MEPs to stay on election-observation blacklist
  3. Turkey's election — the Erdoğan vs Kılıçdaroğlu showdown
  4. When geopolitics trump human rights, we are all losers
  5. EU starts talks on 11th round of Russia sanctions
  6. EU fears Tunisia turmoil will spark migrant boat departures
  7. 'Symbolic' Putin indictment gets some EU backing
  8. 'Final warning' to act on climate change, warns IPCC

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic and Baltic ways to prevent gender-based violence
  2. Nordic Council of MinistersCSW67: Economic gender equality now! Nordic ways to close the pension gap
  3. Nordic Council of MinistersCSW67: Pushing back the push-back - Nordic solutions to online gender-based violence
  4. Nordic Council of MinistersCSW67: The Nordics are ready to push for gender equality
  5. Promote UkraineInvitation to the National Demonstration in solidarity with Ukraine on 25.02.2023
  6. Azerbaijan Embassy9th Southern Gas Corridor Advisory Council Ministerial Meeting and 1st Green Energy Advisory Council Ministerial Meeting

Join EUobserver

Support quality EU news

Join us