WRITTEN QUESTION E-2690/03 by Erik Meijer (GUE/NGL) to the Commission. Freedom of cantons in Switzerland to turn themselves into a tax haven for international companies.
Date: 2003-09-10
Institutions: European Parliament, Provisional data
Subjects: EU relations, Switzerland, corporation tax, fiscal policy, head office, tax avoidance, tax convention, tax harmonisation

C 88 E/432

Official Journal of the European Union

EN

8.4.2004

stringent requirements than they otherwise might. Therefore, in the framework of its future proposal for
more stringent emission standards (a proposal for Euro V) the Commission will be examining whether it is
appropriate to remove the distinction between category M1 vehicles that are above and below 2 500 kg.

(1) Council Directive 70/220/EEC of 20 March 1970 on the approximation of the laws of the Member States relating

to measures to be taken against air pollution by gases from positive-ignition engines of motor vehicles.

(2) Directive 98/69/EC of the Parliament and of the Council of 13 October 1998 relating to measures to be taken

against air pollution by emissions from motor vehicles and amending Council Directive 70/220/EEC.

(3) Council Directive 70/156/EEC of 6 February 1970 on the approximation of the laws of the Member States relating

to the type-approval of motor vehicles and their trailers.

(4) COM(2003) 418 final.

(2004/C 88 E/0437)

WRITTEN QUESTION E-2690/03

by Erik Meijer (GUE/NGL) to the Commission

(10 September 2003)

Subject: Freedom of cantons in Switzerland to turn themselves into a tax haven for international

companies

1.
Is the Commission aware that the taxation of companies registered in Switzerland is a matter for the
individual cantons rather than for the ‘Confederatio Helvetia’ to which they belong, and that the level of
company tax can therefore differ according to canton?

2.
Is the Commission also aware that such tax competition between Swiss cantons has led to the canton
of Schwyz becoming the statutory place of establishment of international companies or branches thereof
which only have a small office and a P.O. box in the canton, and that in particular the northern part of
this canton, which falls within the sphere of influence of the city of Zurich, especially the district of Höfe
including the towns of Pfäffikon (SZ) on the Lake of Zurich, Schindellegi and Feusisberg, has become an
attractive place of establishment?

Does the Commission know how many companies that do not conduct their business mainly in
3.
Switzerland but in the EU have moved the statutory seat of the company or branches thereof to the canton
of Schwyz?

4.
In the light of the wish to restrict tax competition not only within the EU but also in directly
neighbouring countries, is the Commission engaged in direct consultations with the canton of Schwyz,
rather than just with the ‘Confederatio Helvetia’?

If the answer to question 4 is affirmative, what has been the outcome of these consultations? If the

5.
answer is negative, when will consultations be opened?

6. Would it be possible, as a means of applying pressure, to impose sanctions if necessary against the
government of the canton of Schwyz that would not affect Switzerland as a whole? Does the Commission
intend to avail itself of this possibility if necessary?

Answer given by Mr Bolkestein on behalf of the Commission

(16 October 2003)

The Commission is aware of the fact that the federal system of Switzerland provides for corporate tax to
be levied at federal, cantonal and municipal level and that the individual cantons apply different rates of
corporate tax. The resulting difference in tax rates existing between different municipalities within
Switzerland has,
for many years, been subject of an internal political debate in Switzerland. The
Commission does not have specific information on the effects of tax competition between cantons within
Switzerland; nor does it have specific information on the number of companies conducting their business
mainly in the Union but resident in the Swiss canton of Schwyz.

8.4.2004

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Official Journal of the European Union

C 88 E/433

The questions from the Honourable Member appear to suggest that the canton of Schwyz attracts passive
investment without any real economic activity taking place or without any real economic presence being
transferred there. However, it should be noted that the tax legislation of Member States and their bilateral
tax treaties with Switzerland contain specific rules limiting the possibilities of tax planning structures
involving the use of so-called ‘mailbox’ companies. Most Member States also have specific anti-abuse
measures in their domestic legislation designed to discourage aggressive tax planning structures that are
based on artificial location of passive investment in low tax jurisdictions.

Regarding tax competition, the Commission is of the opinion that fair tax competition can have positive
effects, such as reducing unnecessary tax burdens and increasing the competitiveness of the Union.
However, unfair tax competition that affects, in a significant way, the location of business, without having
an overall positive impact, is harmful. This is why the Commission is taking active part in the work against
harmful tax competition in the enlarged Union, mainly through the Code of Conduct exercise. For the
same reason the Commission is also actively engaged in the Organisation for Economic Cooperation and
Development (OECD) work against harmful tax practices, which has a global approach and attempts to
change the behaviour both of tax havens and of the OECD member countries (including Switzerland) to
the extent that they participate in harmful tax competition.

So far the discussions, which have been taking place both at an Union level and elsewhere, including in the
OECD, have been exclusively with Switzerland as it
is responsible for
international relations. International law requires the Community to respect the constitutional division of
powers in Switzerland and to conduct consultations with the Federal Government.

is the Confederation that

While not excluding a different approach in the future, the Commission is confident that, at present, the
above approach provides the best means of ensuring fair tax competition, at a truly global level and would
not, at this stage, wish to speculate on other measures.

(2004/C 88 E/0438)

WRITTEN QUESTION E-2700/03

by Glenys Kinnock (PSE) to the Commission

(10 September 2003)

Subject: Inquiry into the kidnapping of Peter Shaw

Would the Commission give a clear and detailed account of any progress made by the Georgian authorities
in the inquiry into the circumstances surrounding the kidnapping of Peter Shaw?

Does the Commission deem it unacceptable that so little information is available and that Peter Shaw has
every right to expect that a full and comprehensive inquiry will be carried out?

Answer given by Mr Patten on behalf of the Commission

(3 October 2003)

Ever since Peter Shaw regained his freedom in November 2002,
the Commission has used every
opportunity to stress to the Georgian Government the importance it attaches to bringing his kidnappers to
justice. The Commission considers this to be an important signal of efforts to strengthen the rule of law in
Georgia. The forthcoming EU-Georgia Cooperation Council will provide a further occasion to discuss the
state of the investigations.

The Commission, through its Delegation and in cooperation with the British Embassy in Georgia, has
regularly sought information from the Prosecutor General of Georgia on progress in the investigation. The
Prosecutor General has recently informed the Commission that
the case is still being investigated.
Individuals involved in the kidnapping of Mr Shaw have been identified but more evidence is needed
before they can be arrested and brought to court. Mr Chichiashvili, a Georgian national, wanted in Georgia
in connection with several kidnappings, including that of Mr Shaw, has been arrested in Moscow.