Thursday, October 11, 2012

New data: Swiss tax privileges for commodity groups contribute to exploitation of developing countries


Here is a slightly condensed and translated version of a press release from the Berne Declaration, originally in German. This provides important new information on a little-understood sector. This comes in the context of interesting dynamics in Switzerland, with a sizeable share of the population apparently increasingly uncomfortable with commodity-based sleaze. Read about that here.

New data: Swiss tax privileges for commodity groups contribute to exploitation of developing countries

The Swiss Tax Administration has for the first time released official figures showing the size of profits of Swiss-incorporated transnational companies that enjoy special tax status.

A study published early October by the Swiss Federation of Trade Unions (SGB) estimated the profits of multinational corporations with special status (benefiting at the cantonal level from a preferential tax rate) to 39 billion CHF (in 2008). This was the first time these gains were quantified. The EU strongly criticizes these special rules. That's why the Swiss tax administration so far has been careful not to release data about this explosive topic.

This week, Swiss Television (RTS) (in French here) first published official figures. According to information provided by the Swiss Federal Tax Administration these untaxed corporate profits in 2008 amounted to 53 billion CHF and the following year even to 62 billion CHF. Not included in these gigantic sums are tax-exempt profits booked by holdings, which amounted to 195 billion CHF in 2008 alone.

To take advantage of these special rates, companies must generate at least 80 percent of their sales abroad. So the tax base is not generated in Switzerland, but consists of artificial profit shifting, to benefit from lower or zero tax. The SGB study shows that a large part of these profits booked in Switzerland stems from commodity trading and extractive industry firms - a sector whose turnover has exploded in recent years.These corporations, attracted by cantonal tax privileges, are predominantly active in developing countries. With its corporate tax policy, Switzerland therefore contributes significantly to the migration of the tax base and hence the exploitation of these countries.

More information here (RTS broadcast "toutes taxes comprises") or contact Olivier Longchamp, Berne Declaration, 0041-21620 03 09, longchamp@ladb.ch

0 Comments:

Post a Comment

Links to this post:

Create a Link

<< Home