Switzerland has signed a joint statement with the European Union which aims to put an end to a controversy over corporate taxes.

Switzerland has signed a joint statement with the European Union which aims to put an end to a controversy over corporate taxes.

The agreement, signed yesterday in Luxembourg, ends a bilateral controversy which has put a strain on relations between Switzerland and the EU for almost ten years.

The declaration includes plans to abolish certain tax regimes that provide preferential treatment for foreign holding companies and will be based on international standards set by the Organisation for Economic Co-operation and Development.

In return, the EU member states confirmed that they will lift any countermeasures taken against these regimes as soon as they have been abolished.

The signing took place on the fringes of the joint meeting of the economics and finance ministers of the EU and their counterparts from the EFTA countries.

Swiss finance minister Eveline Widmer-Schlumpf stressed to her European counterparts that attention should be paid to ensure financial market regulation does not hinder economic growth and investments.

Widmer-Schlumpf said that good international cooperation and a level playing field are crucial for competition between the business locations and financial centres.

The news follows reports that the Italian and Swiss ministers clashed on Monday over the failure to reach an agreement aimed at fighting tax evasion that could lead to Switzerland opening up its bank databases to Italian tax authorities.