Switzerland will make proposals by the middle of this year on how to solve a disagreement with the European Union over tax rates paid by multinational corporations, according to Finance Minister Eveline Widmer- Schlumpf.
Tax rates vary among Switzerland’s 26 cantons, and they may charge companies less tax on income earned abroad than on that earned in Switzerland. The practice, termed “ring-fencing,” has helped Switzerland to attract big companies such as Glencore International Plc. (GLEN) EU officials say that this system gives foreign firms an unfair advantage.
“By the middle of the year, the middle of the Irish EU presidency, we’ll have to make proposals,” Widmer-Schlumpf said in a speech to members of a economics society in Bern late yesterday.
EU countries have threatened countermeasures if Switzerland doesn’t act by then.
“We’ll without a doubt stick to our sovereignty and our inter-cantonal tax competition,” she said. “We will construct the tax system in a way in that it’s accepted and at a same time in a way that we assure income.”
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