* Follows criticism of Swiss system by Brussels
* EU has threatened countermeasures if no Swiss proposal
By Emma Farge
GENEVA, March 18 Switzerland plans to present a
reform of its corporate taxation law by mid-year, its finance
minister said on Monday, bowing to pressure from Brussels after
a row over the incentives it offers to multinationals.
Financial haven Switzerland is home to thousands of global
companies including commodities trading giant Glencore
and online retailer eBay.
But the European Union says non-EU Switzerland has used
"unauthorised state aid" to lure firms by offering special
cantonal tax rates on foreign revenues in a practise known as
Brussels has threatened unilateral measures, which might
include trade tariffs, if Switzerland does not reform.
"We have until mid-year to hand over the parametres of a
possible solution to Ireland, which holds the current EU
presidency and also the EU Commission. We will also do that
together with the cantons," Swiss Finance Minister Eveline
Widmer-Schlumpf said in parliament on Monday.
She did not elaborate on the content of the reform, which is
expected to take effect from 2018.
Reform proposals in Switzerland have included using
so-called licence boxes to allow income from certain businesses
such as intellectual property to be taxed at a lower rate.
The Geneva canton, home to commodity trading firms Vitol and
Trafigura, has proposed a standard corporate tax
rate of 13 percent for both foreign and domestic income. This
compares with a current rate of around 24 percent for Geneva
firms not qualifying for special tax rates.
"This reform has a threefold objective: ensure the
effectiveness of our tax regime, an increase in its acceptance
at an international level and, third, to secure the necessary
financing," Alexander Karrer, deputy secretary of the State
Secretariat for International Financial Matters, said in a
speech in Geneva last week.
Denknetz, a left-wing Swiss think tank, estimates
Switzerland's special tax regimes deprives other countries of up
to 36.5 billion francs ($39 billion) in tax revenue each year -
almost double the amount Spain's government raised in corporate
tax in 2011.