The European Commission has decided that certain company tax regimes in Swiss Cantons in favour of holding, mixed and management companies are a form of State Aid.

You might wonder why the EU can issue such rulings in relation to a territory that is not a Member State. Well, Switzerland has access to the EU market through an agreement between the European Economic Community and the Swiss Confederation which dates from 22 July 1972.

The EU has formed a view that the company tax regimes in question are incompatible with the proper functioning of the 1972 Agreement between the EU and Switzerland. At stake are schemes offering unfair tax advantages to companies established in Switzerland, for profits generated in the EU. The Commission has asked Switzerland to amend these tax schemes to bring them in line with the terms of the 1972 Agreement.

The Commission has also asked the Council for a mandate to start negotiations with Switzerland with a view to finding a mutually acceptable solution.

Further information is available at http://europa.eu/rapid/pressReleasesAction.do?reference=IP/07/176&format=HTML&aged=0&language=en&guiLanguage=en.