BERN, Switzerland (AFX) - Switzerland could make concessions in the face of pressure from the European Union over its corporate tax system, Finance Minister Hans-Rudolf Merz said in an interview published Saturday.
'Our situation is not comfortable,' he told the daily Der Bund, adding that changes could be made to the taxation system or in another field.
But he warned that Bern could not give way on matters of sovereignty.
The European Union earlier this month called for further talks over Switzerland's policy on corporate taxation.
The Swiss offer tax breaks for corporations that are based in the country but do not carry out any business locally. Brussels has accused Switzerland of violating a 1972 free trade accord.
Switzerland is also under fire, notably from neighbouring France, for tax breaks for wealthy foreigners who move to the country to avoid wealth tax at home.
Merz conceded that Swiss taxes might be lower than in other countries, but said it was a question of domestic policy for each state.
The Alpine country is heavily decentralised and the 26 cantons (regions) have sovereignty over taxation. They effectively compete against each other by offering different personal or corporate tax rates. mnb/mb/smc/paw COPYRIGHT Copyright AFX News Limited 2006. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News. AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited