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FRANCE

French ‘double tax’ decision angers Swiss

A decision by France to start taxing wealthy French citizens living in Switzerland who benefit from tax concessions has angered Swiss authorities.

French 'double tax' decision angers Swiss
Swiss President Eveline Widmer-Schlumpf meeting with France's Hollande in Paris last month. Photo: AFP

The Socialist government of François Hollande announced the decision on December 26th, prompting one Swiss politician, the canton of Vaud’s Finance Minister Pascal Broulis, to describe the move as a “declaration of war”.

As of January 1st, well-heeled French citizens officially residing in Switzerland will no longer benefit from a deal that allows them to pay a lump-sum tax to Swiss governments, in addition to a reduced levy on dividends to Paris.

The French fiscal changes, affecting around 2,000 people, will require such residents to also pay French taxes.

Swiss officials were caught off guard by the move, part of a general campaign by the Hollande government to clamp down on wealthy French citizens seeking ways to evade taxation.

Bern was not officially notified of the double taxation change, Roland Meier, spokesman for the Swiss federal finance department, told the ATS news service.

“We learned of it through a third party,” Meier added.

Broulis, Vaud’s right-wing finance minister, said he was shocked and surprised by the decision taken in Paris.

It was “unilateral, a declaration of war, once more on the part of France,” he is quoted as saying by ATS.

“There is a risk of mounting tension between two countries that are friends — it’s not very healthy,” Broulis said.

“France is a major partner,” he said.

“Many frontaliers (people with jobs in Switzerland who live in a neighbouring country) work in Switzerland and five to seven billion francs in wages flows from Switzerland to France.”

Politicians in Geneva were also concerned by the French decision.

“I deplore the method and the motives of France,” Vincent Maitre, a Christian Democratic Party MP and member of the canton’s tax commission, told the Tribune de Genève.

Maitre said France never ceases to view Switzerland as a tax haven “while they shelter their own tax havens in certain French Polynesian islands”.

He added however that the Hollande government could expect to see many French citizens living in Switzerland to give up their French citizenship rather than be subjected to double taxation.

A policy has existed since 1972 that has allowed French multimillionaires in Switzerland to only pay their taxes in Switzerland, except for a 15-percent levy on dividends.

The dividend tax rate is half of what would be paid in France.

In return, such citizens pay a Swiss tax based not on revenues but on estimated personal expenditures.

In addition to an estimated 2,000 French citizens, 3,445 other wealthy foreigners in Switzerland benefit from advantageous tax concessions, mostly in the French-speaking part of the country.

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SKI

Franco-Swiss cold war breaks out over ski border car park

Switzerland and France are in a snowball fight over a cross-border car park which serves Swiss ski slopes but has been closed by the French due to the coronavirus pandemic.

Franco-Swiss cold war breaks out over ski border car park
The object of the Franco-Swiss war: parking lot Les Dappes. Photo by AFP

The Battle of Dappes Car Park — for the moment a rather cold war — has been rumbling for weeks, triggered by the different Covid-19 rules on either side of an invisible line in a snow-covered field.

The 650-space car park sits in the valley between the pistes of La Dole on the Swiss side, and Les Tuffes in France. It is 250 metres inside French territory.

In the Jura mountains, the summit of La Dole overlooks Lake Geneva in the west of Switzerland — a country which has kept ski slopes open despite the pandemic, while neighbouring France has closed theirs.

So the chair lifts for La Dole sit empty — because nobody can use the shared car park in France.

“I cannot understand how the French authorities can decide that the Swiss cannot go skiing in their own country. This is a unilateral decision,” fumed Gerard Produit, tourism chief in Switzerland's Nyon region.

“We are being held hostage by the politics of both countries,” he told AFP, deploring the “legal imbroglio”.

The frozen chair lifts are an unwelcome sight for Patrick Freudiger, the boss of the Tele-Dole ski lifts company.

“In mid-December, we organised a meeting between France and Switzerland to present the Covid plan” for La Dole, Freudiger told AFP.

But since the end of December, “we have received three successive orders banning the use of the car park” — the latest one being valid until February 3.

READ MORE: Large crowds on Swiss ski slopes spark concern over coronavirus spread

'They won't listen' 

The prefecture of the Jura local authority in France told AFP the car park is “likely to encourage the gathering of more than six people in a public space in France, the mixing of groups, and therefore the circulation of the virus”.

The wider Bourgogne-Franche-Comte region has the highest intensive care bed occupancy rate in France, while the Jura local authority area has one of the highest Covid-19 incidence rates in the country.

Freudiger is fuming that the French authorities did not try to reach an agreement on access to the car park.

Rubbing salt into the wounds, the site was refurbished last year thanks to Swiss investment, as part of a project to create a cross-border ski destination.

Freudiger also voiced surprise that the car park is shut while car-pooling car parks for French inhabitants who work in Switzerland remain open.

“We tried to get in touch with the prefect; we could not reach him. They do not hear us, they won't even listen to us,” said Produit.

See you in court 

Tele-Dole filed two appeals last Friday to the Besancon administrative court in France over the situation. A hearing is scheduled to take place next Monday.

Switzerland's Nyon region wrote to the Jura authorities on Thursday requesting talks “as soon as possible” on potential solutions and “financial compensation” for Tele-Dole.

According to Freudiger, the ski lifts have already lost 40 working days — almost half the season — and 300,000 Swiss francs (€280,000).

Tele-Dole cannot claim any financial assistance from the Swiss government, because there is nothing to stop ski stations remaining open during the pandemic.

Etienne Bovard, director of La Dole's Swiss Ski School, faces the same headache. The school has around 20 instructors but has had to stop all group lessons.

“In terms of turnover, we are 20 percent down at the moment, and if this continues throughout February… it will amount to an 85 percent loss,” he said.

“What's terrible is that it's the children,” who make up 80 percent of the clientele, “who are victims of this political game”.
 

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