June 2021 / Switzerland

June 23 2021

Swiss Economy is the most competitive in the World

Switzerland heads the ranking of the most competitive economies in the world. The country managed to navigate the coronavirus crisis more effectively than others. The ranking, which has been compiled by the Lausanne-based IMD since 1989, was previously topped by Singapore.

The coronavirus crisis has left an indelible mark on the competitive standing of global economies. This is also reflected in the ranking of the world’s most competitive countries, now published by the IMD Business School in Lausanne for the 33rd time.

Switzerland dethrones Singapore

For the first time, Switzerland has claimed top spot among the 64 examined economies in this ranking. In so doing, it has overtaken Singapore, which has slipped four places down to fifth spot. “Although Switzerland was slow to fight the pandemic, it has not jeopardized its future economic growth because it has kept a disciplined financial strategy by not spending too much”, explains Arturo Bris, Director of the IMD World Competitiveness Center, in a press release covering the report.

Swiss infrastructure second to none

According to its country profile, Switzerland scored well also due to its infrastructure, which is currently regarded as the best in the world. In terms of government efficiency, Switzerland takes second place, while the country is ranked fifth for the category of business efficiency. Switzerland was also among the best countries in the world for economic performance, claiming seventh position for this metric.

The strong performance in the present ranking makes up for the decline recorded over recent years. Switzerland, which was ranked second overall last year, had fallen as far as fifth place in 2018. It has therefore managed to climb the rankings since then.

An eye on the future

Nevertheless, Switzerland will continue to face challenges in 2021. These include ensuring a rapid recovery following the crisis as well as keeping the markets open and defending against protectionism. Competition in the domestic market needs to be strengthened in order to increase productivity, while improvements must also be realized in connection with the sustainability of social works and the pension system in particular.

Behind Switzerland, Sweden takes second place (rising four places in the process), with Denmark and Norway in third and fourth respectively. Taiwan is also among the climbers, moving up three places to finish in eighth position, as is China which jumped four places to 16th position. Germany rose two places to finish in 15th.

The IMD produces the ranking on the basis of 334 separate criteria in collaboration with local partner institutes located in 58 countries.

Source: Switzerland Global Enterprise

June 25 2021

COVID-19 Pandemic: Germany and Switzerland Prolong Mutual Agreement on Frontier Workers Until 30 September 2021

According to an update of 23 June 2021, published by the German Ministry of Finance, the mutual agreement between Germany and Switzerland, signed on 11 June 2020, regarding the taxation of income earned by frontier workers during the COVID-19 pandemic is prolonged until 30 September 2021. Previously, the mutual agreement had already been prolonged until 30 June 2021.

The text of the extension can be found here (in German).

June 17 2021

COVID-19 Pandemic: France and Switzerland Prolong Mutual Agreement on Cross-Border and Frontier Workers Until 30 September 2021

The mutual agreement concluded between France and Switzerland on 13 May 2020 regarding the taxation of income earned by cross-border and frontier workers during the COVID-19 pandemic has been prolonged until 30 September 2021. The Swiss tax authorities made this announcement on 16 June 2021.

The mutual agreement applies with effect from 14 March 2020. Previously, the mutual agreement had been prolonged until 30 June 2021.

June 18 2021

Switzerland and the United Kingdom Sign MoU on Implementation of Mutual Agreement Procedures under Tax Treaty

On 16 June 2021, Switzerland and the United Kingdom signed a mutual agreement to establish the mode of application of the arbitration process provided for in Article 24(5) of the Switzerland - United Kingdom Income Tax Agreement (1977) (as amended through 2017). The competent authorities further agreed that they may modify or supplement the mutual agreement by an exchange of letters between them. The mutual agreement applies to any request for arbitration made pursuant to paragraph Article 24(5) of the treaty after that provision has become effective. In respect of cases presented to the competent authorities before the date of signature of the mutual agreement, the time limit for the competent authorities to request further information from the taxpayer under the provisions of subparagraph b) of paragraph 3 of the mutual agreement will be 90 days from the date of signature of the mutual agreement.