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Business Association Chemistry Pharma Biotech |
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Newsletter
October 31st, 2017
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scienceindustries, the Swiss Business Association Chemistry Pharma Biotech, keeps you abreast of our industry's viewpoints regarding current business and social issues. |
Topics
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Tax proposal 17 contains stumbling blocks that have to be overcome before a next referendum |
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Responsible Business Initiative overshoots the mark |
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Where is the energy policy heading? |
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No urgency for European policy |
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Business relationships between Switzerland and the UK in the context of Brexit |
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Revision of Data Protection Act: genetic data as term must be defined precisely |
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VOC incentive tax: impact analysis should provide clarity |
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Water protection: collaboration between all players in the National Action Plan on risk reduction and the sustainable use of plant protection products |
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Gottlieb Keller has been elected Vice-President of economiesuisse |
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Director Beat Moser will retire at the end of the year |
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Tax proposal 17 contains stumbling blocks that have to be overcome before a next referendum
The Swiss voters rejected the Corporate Tax Reform III last February. During the consultation process on the Federal Council's tax proposal 17, scienceindustries continued to focus on the tax measures that are important to our industry, i.e. patent box and R&D super-deduction. These measures are still included in the proposal in more or less the same form. The patent box, however, does not include report protection for plant protection products. This is required if the patent box should be compatible with the OECD's practices. The limitation of the reduction to a maximum of 90% is also not OECD-compliant and is unnecessary.
The entire reform could be put at risk politically by the reduction in the cantons’ share in federal taxes to 20.5% (from 21.2% proposed by Corporate Tax Reform III). Criticism should also be levied at the increase in the partial taxation of dividends to at least 70%. This uniform approach for all cantons cannot be justified in terms of the tax system, and the correct measure would be to instruct the cantons to treat all forms of business entity equally (neutral business taxation).
The proposed increase in minimum family allowances will place an additional burden on the business sector. The failure to include the notional interest deduction would be problematic not only for the Canton of Zurich, but national fiscal equalisation (NFE) means that it will also have a negative impact on many other cantons.
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Responsible Business initiative overshoots the mark
The Responsible Business Initiative, which is supported by a broad-based alliance of NGOs, trade unions and church organisations, calls for the introduction of statutory obligations and responsibilities for business operations in Switzerland. In specific terms, business operations in Switzerland should assume liability for the exercise of due diligence in their foreign activities by their subsidiaries and suppliers, in particular in the fields of human rights and the protection of the environment. Victims of alleged violations of these duties should then be able to file a suit in Switzerland and in accordance with Swiss law against the companies in question. This would apply to all business operations in Switzerland, including multinationals, SMEs and retailers selling products from across the world.
The global companies represented by scienceindustries comply with the legal framework in their respective countries of operation and also follow internationally recognised standards where local laws and customs fall short of these standards. Our companies also observe international agreements, such as those of the OECD. Special Swiss regulations that burden our economy with additional red tape and throw open the doors for lawyers from everywhere in the world to take legal action against companies in Switzerland may not become a reality. scienceindustries is of the opinion that politicians should come up with a counter-proposal that is less technical and prevents the possibilities of filing suit in Switzerland.
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Where is the energy policy heading?
Following the yes vote by the Swiss voters in May this year, the revised Energy Ordinance will kick off the implementation of the Energy Strategy 2050. The short-term consequence is that the levy on the feed-in tariff at cost (FIT) will increase from 1.5 cents to 2.3 cents per kilowatt hour from 1 January 2018. At the same time, new calculation methods considerably improve companies’ options for exemption, and more member companies of scienceindustries will be able to apply for a refund.
Parliament decisively rejected the Federal Council's proposal for a climate and energy management system (CEMS). The CEMS was originally intended as the second phase of the Energy Strategy 2050 and was expected to regulate the transition from a support system to a management system. This means that the political sector now has to tackle the still unsolved challenges of energy and climate policy (including security of supply, competitive capacity, CO2 emissions) without a viable concept.
For example, the majority of the ESPEC-N wanted to misuse the process of transforming and extending the electricity grids in the short term by having electricity consumers fund additional subsidies to the operators of hydroelectric power plants. This plan was foiled by the joint intervention of scienceindustries, Swissmem and economiesuisse.
But the search for options to support the “suffering” hydropower plants is continuing under the “energy market design” label. For some time now, the Swiss Federal Office of Energy SFOE has been working on “market models” which it wishes to integrate in the revision of the Electricity Supply Act, which should be finished by the end of 2022. In this regard the SFOE ordered a study designed to forecast supply and demand trends in the longer term, which can then be used to formulate forecasts about the security of supply. scienceindustries will use this opportunity to air its well-known concerns about the energy policy. But care should be taken that electricity market design does not become just a euphemism for increases in electricity prices.
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No urgency for European policy
The federal Council in its former assembly had a closed meeting on European policy on 29 September. No important decisions were taken regarding the contribution by Switzerland to the cohesion fund which is expected by the EU or the institutional agreement. It is in particular still not clear what conditions have to be fulfilled before Switzerland would be willing to pay the cohesion contribution. It was decided, however, to take up exploratory discussions with the countries that are likely to receive the cohesion payments. Important points concerning the institutional agreement with the EU are still open, and Switzerland is no longer aiming for a quick agreement.
According to the Federal Council, the agreements on market access (MRAs, among others) can only be upheld and developed further if the institutional rules governing cooperation with the EU are untangled. The negotiations needed to do this have not yet been finalised: important questions regarding the procedures for dispute resolution and their scope of application, state subsidies and certain aspects of the free movement of persons are still open.
The EU's insistence on an institutional framework agreement is understandable, as it would simplify the upgrading of the existing agreements and the future development of the agreements on market access. But scienceindustries continues to believe that there is no urgent need to finalise the negotiations on an institutional agreement, in particular because the Brexit negotiations could change the playing field.
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Business relationships between Switzerland and the UK in the context of Brexit
The fifth round of negotiations did not achieve the intended objectives (finalisation of exit negotiations: agreements regarding financial obligations, citizens’ rights and the border with Ireland). The European Union and the United Kingdom wish to accelerate the stagnating Brexit negotiations, according to a joint statement by the President of the European Commission Jean-Claude Juncker and Prime Minister Theresa May on 16 October. Negotiations about the future relationships between the EU and the United Kingdom can start at the earliest after the EU Summit in mid-December 2017.
To guarantee legal certainty for economic relationships between Switzerland and the UK in this environment, a Swiss-UK bilateral agreement should be on the table before the UK leaves the EU. Swiss diplomacy is well-positioned in this regard at present, but may not lag in its efforts to find a separate solution for Switzerland. In technical terms, this could take the form of a latest generation free trade agreement which substantially contains the provisions of the current agreements with the EU.
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Revision of Data Protection Act: genetic data as term must be defined precisely
In September 2017, the Federal Council published its Dispatch on the revision of the Data Protection Act. The scienceindustries working group has analysed the draft Data Protection Act and identified the focal points for the upcoming political process.
It is very important for the life sciences industry that the term “genetic data” is precisely defined to ensure that only genetic data that are processed for identification purposes fall under sensitive data as defined by the DPA. Improvements are also needed with regard to profiling and the targeted consent for automated analysis. The idea that companies should appoint data protection officers is good, but such officers need to be given a sufficient number of tasks and powers. The introduction of special regulations regarding deceased persons is still rejected. The National Council's Political Institutions Committee will start its consultation process at the end of October.
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VOC incentive tax: impact analysis should provide clarity
As the original objective of the incentive tax has been achieved, scienceindustries has long since advocated the abolition of the VOC incentive tax and also supported Walter Wobmann's motion in this regard which was adopted by the National Council. As it has become clear in the Council of States’ ESPEC commission that this motion is unlikely to receive majority support in the Council of States, scienceindustries has come out in favour of a more moderate version that would incorporate some elements of the VOC Ordinance in the Ordinance on Air Pollution Control. This argument has been proven to meet the objectives: the ESPEC-S has deferred the matter until the Federal Office for the Environment FOEN, in cooperation with the industry, will present an analysis of the impact of the VOC Ordinance. The initial results are expected at the end of 2017.
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Water protection: collaboration between all players in the National Action Plan on risk reduction and the sustainable use of plant protection products
Water protection is a key element of the Federal Council’s National Action Plan on risk reduction and the sustainable use of plant protection products. All the players involved in this plan are working together, including representatives of scienceindustries. As a member of the Advisory Committee of Eawag, scienceindustries has been able to intensify the exchange of information and collaboration with the industry. Several areas of mutual concern have been identified. In addition to the surface waters, the public debate is increasingly also focusing on ground water. As particular attention has to be paid to the approach of the water suppliers, scienceindustries has also initiated discussions with the competent Swiss Gas and Water Industry Association SVGW.
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Gottlieb Keller has been elected Vice-President of economiesuisse
At the annual general meeting of the umbrella organisation of the Swiss economy on 25 August 2017 in Geneva, economiesuisse elected the Chairman of scienceindustries, Gottlieb A. Keller, Member of the Executive Committee of F. Hoffmann-La Roche AG, as its Vice-President. National Councillor Magdalena Martullo, CEO of Ems-Chemie Holding AG was elected to the board of economiesuisse as representative of scienceindustries.
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Director Beat Moser will retire at the end of the year
After almost 32 years working for scienceindustries, of which 18 years as Director of the Business Association Chemistry Pharma Biotech, Beat Moser will retire at the end of 2017. The Board of scienceindustries has started the search for his successor and will soon take a decision on the appointment of a new director.
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Do you want to know more about our points of view, or do you have any questions about them? Follow us on Twitter or contact our specialists at scienceindustries.
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sig. Dr. Beat Moser
Director |
sig. Marcel Sennhauser
Head of Communications |
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