Agreement with the EU: goodbye to fiscal sovereignty too?

Context

TL;DR

• NZZ raised the alarm on October 6
• Hongler and Imstepf point to a risk concerning EU tax rules
• In 2024, the EU Court imposed 13 billion on Apple
• The treaty provides for a new state aid authority

Key facts

• Author → Lorenzo Quadri, National Councillor
• Experts cited → Peter Hongler and Ralf Imstepf
• Mechanism indicated → state aid
• Austrian case → reduced VAT rate annulled
• Apple case → 13 billion in back taxes in 2024
• New structure → state aid supervisory authority

On October 6, NZZ sounded an alarm that touches on Swiss fiscal federalism: the new agreement with the European Union, according to two tax law professors cited by the Zurich newspaper, could reduce Switzerland's tax sovereignty. Lorenzo Quadri, a National Councillor from the Lega dei Ticinesi, is bringing the issue back into the spotlight, pointing to the risk of less freedom for cantons and municipalities and higher taxes for companies and taxpayers.

The experts are Peter Hongler and Ralf Imstepf. Their thesis, as reported by Quadri, is that the agreement could open the door to European tax regulations. In the text, this hypothesis is presented as a possible loss of sovereignty in an area considered decisive.

The state aid mechanism

At the center of the mechanism are state aid measures: the EU aims to prevent public authorities from granting certain companies advantages capable of distorting competition. According to the source, the concept could include not only direct subsidies but also certain tax breaks.

If the agreements were approved, the Confederation, cantons and municipalities would therefore have to take European state aid rules into account when drawing up new tax provisions. A tax reduction designed to attract companies, support investment or strengthen competitiveness could end up in the sights of foreign judges in Brussels.

For those who live or work in Switzerland, the passage described concerns the freedom with which public authorities set tax conditions. Quadri presents the risk in stark terms: a tax decision made democratically in Switzerland could be invalidated by rules established by the EU. For a first comparison with one's own situation, the site offers calcolatore stipendio e imposte, without turning this political hypothesis into an already determined figure.

Among the examples cited are two foreign cases. In Austria, a reduced VAT rate was annulled following European intervention, as the Zurich newspaper recalls. In 2024, moreover, the Court of Justice of the EU ordered Apple to pay 13 billion in back taxes, after ruling that the tax advantages granted by Ireland were illegal.

The treaty also provides for a new authority tasked with overseeing state aid. In his intervention, Quadri places the tax issue among the consequences he attributes to the so-called Bilaterals III, together with the dynamic adoption of European law and foreign judges.

Operational details

The possible impact on fiscal federalism

From Swiss leeway to European scrutiny

For a taxpayer or a company, the practical issue is not limited to a possible increase in taxes. The key issue is the leeway with which the Confederation, cantons and municipalities could design tax incentives if the agreements were approved. The source describes a shift from a choice made within the Swiss system to a choice that would also have to be assessed against European state aid rules.

The before-and-after comparison, in the reconstruction proposed, does not concern a single tax rate. It concerns the place where a tax decision is assessed. On one side is the democratic choice made in Switzerland; on the other is the risk that a European rule could render it invalid. For this reason, the alarm concerns both business taxation and taxpayers' relationship with taxation.

| Subject | Decision under consideration | Risk indicated | | Confederation | new tax provisions | comparison with EU state aid rules | | Cantons | tax breaks or tax reductions | possible European scrutiny | | Municipalities | new tax provisions | limitation of decision-making freedom |

The table does not indicate an automatic outcome: it reproduces the conditional scenario described by the source. A measure intended to attract companies could be examined not only for its Swiss objective, but also for its effect on competition. The same applies to an intervention intended to support investments or strengthen competitiveness. If the tax break were considered unlawful state aid, the decision could come under scrutiny from foreign judges in Brussels.

For the cantons, this point directly concerns tax competition, which the source presents as a component of Swiss federalism. For municipalities, it affects the freedom to devise new tax provisions. For companies and taxpayers, the risk explicitly mentioned is that of higher taxes.

Anyone wishing to consider this reading alongside their own relationship with the tax system can consult the guide to dichiarazione delle imposte. The personal calculation helps organize their situation; however, it does not replace an assessment of a measure's compatibility with state aid rules.

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Key points

How to follow a tax proposal

Five checks before drawing conclusions

To read a future provision in practical terms, it is advisable to start with the concrete measure rather than the political slogan. The review can follow five steps, all linked to the elements indicated in the source:

1. Identify the institutional level: Confederation, Canton or Municipality. 2. Identify the form of intervention: direct subsidy or tax relief. 3. Clarify the stated objective: attracting businesses, supporting investment or strengthening competitiveness. 4. Verify whether the measure must be assessed in light of European state aid rules. 5. Separate the proposal from the outcome: the text speaks of possible consequences if the agreements are approved.

The first check avoids mixing different areas of competence. In fact, the source identifies all three public levels as entities that, in the scenario described, should take European rules into account when drafting new tax provisions. The second check serves to avoid stopping at the word aid: according to the account given, for the EU the issue may encompass both direct support and the advantage obtained through taxation.

The third step links the measure to its purpose. An incentive intended to attract companies does not have the same purpose as a reduction designed to support investment or competitiveness, but all these purposes are mentioned by the source as possible reasons for a tax choice. The question to leave open is whether the tax relief can be considered unlawful state aid.

The fourth and fifth checks concern the institutional framework. The treaty provides for a new state aid supervisory authority; in Hongler's reading, its function would be to effectively act as a Swiss version of the EU Commission. Therefore, the reader must distinguish between a proposal, its possible approval and subsequent scrutiny, without presenting as already having occurred a consequence that the source places in the conditional future.

On a personal level, you can organize the items affecting your income and compare them with busta paga svizzera. This step does not establish the legitimacy of a tax relief, but helps separate the effect on the individual budget from the political and legal judgment evoked in the article. For a first personal simulation, use calcolatore stipendio e imposte.

Source: tio.ch