Switzerland critical of EU State Aid
A new report, titled “State aid to companies: company taxation and tax competition-developments in the European Union”, approved by the Swiss Federal Council, comes to the conclusion that the EU pursues the approach of restricted tax competition which is complemented by an extensive policy of State Aid.
The report was produced in response to a request made by the Committee for Economic Affairs and Taxation of the Council of States.
According to the Council's press release, the report concludes that “all forms of State Aid constitute an intervention in the free workings of the market and can therefore as a rule not be competition neutral. This is why European competition policy provides for a fundamental ban on State Aid. However, the EU's policy on State Aid allows numerous exceptions which are deemed to be compatible with the Single European Market. In the last few years the European Commission has severely restricted the leeway for the Member States in the tax sector with the code of conduct on company taxation. The EU is therefore critical of tax competition in terms of competition between Member States.”