Mr Burkhalter, the head of the Federal Department of Foreign Affairs, met with Jean-Marc Ayrault, French Minister of Foreign Affairs and International Development, at the Quai d’Orsay in Paris. The two ministers discussed various bilateral matters and reviewed major topical issues, primarily in Europe and the Middle East. On the sidelines of this meeting, Mr Burkhalter signed with Harlem Désir, the French Secretary of State for European Affairs, an intergovernmental agreement about the tax system applying within the confines of EAP, which is a linchpin of the region’s economic infrastructure and Switzerland’s third largest airport. Both hailed the balanced nature of the agreement, which adheres to the principles laid down in the joint declaration of 23 January 2016. The agreement aims to establish a long-term legal regime ensuring that the airport and its businesses remain attractive and promoting their development.
The main points of the agreement signed in Paris today are:
- Swiss value-added tax is to be levied in the Swiss area of EAP.
- France and Switzerland will split the receipts from corporation tax paid by EAP, with all stakeholders taking a share.
- The French Directorate General for Civil Aviation will be compensated for services provided in the Swiss area of EAP.
- Companies in the Swiss area will pay French income tax and Swiss capital tax but will not therefore be liable for the main local ancillary taxes levied in France, to which the Swiss tax is considered equivalent.
EAP is an important facility for both countries, handling over 7 million passengers in 2016. Some 6,200 people work at the site, including over 4,000 employees of the 50 or so businesses located in the Swiss area of the airport. Indirectly, EAP is estimated to support or act as a catalyst for around 30,000 jobs in the wider region, according to a 2008 study by the Canton of Basel-Stadt.
The agreement signed on Thursday will enable EAP and its Swiss area to continue developing effectively. It provides necessary legal certainty on key points while ensuring predictable and economically balanced framework conditions for the airport and the businesses that operate in its Swiss area. In particular, under the new regime the overall tax burden on businesses in the Swiss area will remain similar to what it is currently. The government of Basel-Stadt, which was closely involved in negotiating the agreement, has reiterated its full support to the Federal Council for the implementation of the arrangements.
The Federal Council approved the agreement on 25 January 2017. On 21 February 2017, the Council of the European Union accepted the application for VAT exemption submitted by France. The exemption is to allow Swiss value-added tax to be levied in the Swiss area of EAP. The agreement will be able to enter into force as soon as France has completed its internal approval procedures.
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