Swiss bow to EU over lures to global firms

Switzerland has bowed to pressure from Brussels to reform its corporate tax law after a row over the incentives it offers to multinational firms, its Finance Minister said yesterday.

The nation is home to thousands of global companies, including the commodities trading giant Glencore and online retailer eBay, depriving other countries of up to Sfr36.5bn (£25.6bn) in tax revenue each year, according to the left-wing Swiss think-tank Denknetz.

But the European Union says Switzerland, which remains outside the EU, has used "unauthorised state aid" to lure firms by offering special tax rates on foreign revenues.

Brussels has threatened measures such as trade tariffs if Switzerland does not reform.

"We have until mid-year to hand over the parameters 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," the Swiss Finance Minister, Eveline Widmer-Schlumpf, said yesterday.