Tuesday, November 29, 2011

European Commission Pushes U.K., Germany to Renegotiate Terms of Swiss Tax Deals

The European Commission legal services have concluded that bilateral tax treaties signed by Switzerland, the United Kingdom, and Germany violate European Union law, but European Taxation Commissioner Algirdas Semeta is hopeful that both EU member states will revise the terms of the Swiss deals without having to revert to a long-drawn out legal challenge.

European Commission Spokeswoman Emer Traynor denied media reports that Semeta was threatening legal action against the United Kingdom over the terms of its recently agreed bilateral deal with Switzerland. She noted that the United Kingdom and Germany agreements with Switzerland have not been ratified and that the EU executive was confident that each side “will work to remove the parts that impinge on EU law.”

A legal battle between the European Commission and the United Kingdom and Germany has been brewing since August when the bilateral deals, which are designed to repatriate billions of dollars in revenue hidden in secret Swiss bank accounts, were first announced. Both agreements commit the Swiss to impose penalties but would not alter their bank secrecy laws any more than they have already done to meet OECD and G-20 requirements on tax havens.

The European Commission believes the Swiss deals with the United Kingdom and Germany are illegal because they go against the terms of the EU cross-border savings tax legislation that calls for a system of automatic information exchange.

1 comment:

  1. Swiss Give Muted Reaction to EU Demands for Renegotiation of Tax Deals

    Posted November 29, 2011, 1:35 P.M. ET

    GENEVA—Swiss officials and the country’s banking sector have given a muted reaction to the European Union’s claim that new bilateral tax agreements signed by Switzerland with EU member states Germany and the United Kingdom violate EU law and need to be renegotiated.
    Mario Tuor, spokesman for the Swiss State Secretariat for International Financial Matters, said the Swiss government has received no official word from the EU, Germany, or the United Kingdom regarding the alleged violations.

    Tuor said there have been different comments from different EU offices about the new agreements, both positive and negative.
    “Until now no official statement on the tax treaties has been made by the EU commission,” he added. “We will comment as soon as the official position of the EU is known.”

    Sindy Schmiegel, spokeswoman for the Swiss Bankers Association (SBA), said the group has taken note of reported comments from EU Tax Commissioner Algirdas Semeta regarding the agreements, but is “not aware where concretely he sees conflicts between the bilateral agreements and legal requirements on EU level.”

    In the view of the SBA, “the agreements concluded with Germany and the U.K. are well-negotiated compromises,” she added. “All involved parties extract advantages out of the agreements, but had to make concessions as well.”

    “The SBA therefore considers the agreements as balanced and does not see any room for renegotiations,” she declared.