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Switzerland and France sign agreement on EuroAirport Basel Mulhouse Freiburg

On 23 March 2017, an intergovernmental agreement between Switzerland and France on the tax system applicable to EuroAirport Basel Mulhouse Freiburg (EAP) was signed in Paris. The agreement will promote the development of the airport and help to preserve its attractive. Also, it is intended to provide the legal certainty necessary to the businesses based there.

The key points of the agreement signed are as follows:

– Swiss value-added tax is to be levied in the Swiss area of EAP. France and Switzerland will split the receipts from corporate 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. However, they will not be liable for the main local ancillary taxes levied in France equivalent to the Swiss tax.

It should be recalled that EAP has handled over 7 million passengers in 2016. Some 6,200 people work at the site, including over 4,000 employees of about 50 businesses located in the Swiss area.

The agreement was approved by the Federal Council on 25 January 2017. On 21 February 2017, the Council of the European Union accepted the application for VAT exemption submitted by France, which is to allow Swiss value-added tax to be levied in the Swiss area of EAP. The agreement will enter into force as soon as France has completed its internal approval procedures. All in all, the agreement will enable EAP and its Swiss area to continue developing effectively. The overall tax burden on businesses in the Swiss area under the new regime will remain similar to the existing one.