Switzerland and France have announced that an agreement on the EuroAirport Basel Mulhouse Freiburg (EAP) tax system will come into force from January.

The agreement intends to regulate Swiss companies operating at EuroAirport.

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Swiss Federal Councillor Ignazio Cassis and French Foreign Minister Jean-Yves Le Drian approved the EuroAirport agreement on 18 December. It aims to establish a long-term legal regime for the airport and its businesses so that they can continue to develop.

“The agreement is a success for both our countries and for the economic development of the entire tri-national upper Rhine region.”

Cassis said: “The agreement is a success for both our countries and for the economic development of the entire tri-national upper Rhine region.

“It creates legal certainty for the companies based at EuroAirport, i.e on French soil, makes it possible to continue with the important infrastructure development supported by both states, and has the potential to create new jobs.”

Under the agreement signed in March, VAT will be levied in the Swiss area of EAP. France and Switzerland will divide the proceeds from corporation tax paid by EAP.

Businesses in the Swiss area will pay French income tax and Swiss company tax. However, they will not be required to pay the French local ancillary taxes.