Legal and political developments in Switzerland

Having recalled the ‘difficult matters’ that we discussed in our course, it is time to take a look at some recent developments on these issues. What has happened in the past months in these fields, both legally and politically?

  • With respect to the issue of corporate taxation, we have noted in Week 1 that, in 2014, the European Union (EU) and Switzerland signed a Memorandum of Understanding formally declaring an end to the EU–Swiss dispute on corporate taxation. This statement concerns the dispute as such, which is now deemed to have come to an end. Note that the EU and Switzerland never reached the point where they agreed on whether or not there was indeed an infringement of the Free Trade Agreement. Rather, Switzerland agreed to change its rules in view of changed Organisation for Economic Co-operation and Development (OECD) standards.

In 2014, the Swiss corporate tax rules had yet to be reformed. This kind of process takes time. In June 2015, the Swiss Federal Finance Department announced: ‘Third series of corporate tax reforms ready for parliamentary deliberation’. In June 2016, the Federal Parliament agreed on the revision. In February 2017, a majority of those voting rejected the reform. A new proposal again led to a referendum and a popular vote in May 2019. This time, the voting population accepted the changes.

  • Turning to the issue of Banking Secrecy, we heard, also in Week 1, that the new rules in the renamed Agreement on the automatic exchange of financial account information should lead to a first exchange of information in 2018. Signed in 2015 and since ratified by the parties, the agreement entered into force on 1 January 2017.

Regarding the initiative to save banking secrecy within Switzerland, the Federal Parliament discussed a counter proposal prepared by its economic committee (Wirtschaftskommission Nationalrat). In 2018, the initative was withdrawn.

  • With respect to the vote of 9 February 2014 on curbing migration, we heard that the Federal Parliament decided not to follow the approach suggested by the Federal Council but to take rather different steps instead in order to tackle unemployment in Switzerland. This was essentially accepted by the EU as not breaching the Free Movement of Persons Agreement.

  • Regarding the institutional issues, the Swiss Federal Government in December 2018 presented the draft text as it had resulted in the negotiations so far and then held consultations. At the time of writing, it remains to be seen what will be the Government’s next step.

Finally, the Swiss Federal Parliament decided in summer 2016 that the request by the Swiss Federal Government of 1992 for talks on potential Swiss membership in the then European Communities should be withdrawn. With a letter dated 27 July 2016, the Federal Council informed the President of the Council of the European Union accordingly. The Federal Administration published the letter (which is written in French) without any further comment.


Further reading

See how the Federal Administration published the letter of the Federal Council informing the EU about the withdrawal of the 1992 request by Switzerland for membership talks without any further comment: Swiss Federal Administration Press Release of 27 July 2016 Withdrawal of Switzerland’s membership application for the EU

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This article is from the free online course:

Switzerland in Europe: Money, Migration and Other Difficult Matters

University of Basel