Germany, Switzerland revise deal terms

By Reuters Time of article published Apr 5, 2012

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Germany and Switzerland signed an amendment to their deal on taxing secret offshore accounts on Thursday, toughening terms for tax dodgers after the main German opposition party blocked the original accord, saying it was too lenient.

The amendment makes it more likely the deal will get the backing from opposition-ruled states and be approved by the German parliament, ending years of tortuous negotiations and netting the country billions of euros.

The German finance ministry said Germany and Switzerland had agreed to raise the retroactive levy on German funds stashed away in Swiss bank accounts to a rate between 21 and 41 percent, from a previously agreed range of 19 to 34 percent.

They also agreed a one-off tax of 50 percent for those who inherit Swiss bank accounts and do not want to declare them, the finance ministry said.

Under the revised deal, German officials will be allowed to put in up to 1300 requests with their Swiss counterparts to investigate cases of fiscal evasion, versus a previously agreed 999.

Germans will have to alert the Swiss authorities when they move their money out of Swiss bank accounts from Jan. 1 2013, versus a previously agreed May 31, in order to prevent an exodus into other offshore accounts.

Germany re-opened negotiations with Switzerland over the deal, which it signed last September, after the centre-left Social Democrats (SPD) said they would block it in the Bundesrat upper house of parliament, where Chancellor Angela Merkel's government no longer has a majority.

The legislation will likely now be put to Merkel's cabinet in May but will only face a vote in the Bundesrat after the summer, once two regional elections which the SPD hopes to win have taken place.

Some SPD states could drop their opposition after those elections, particularly as big states such as North Rhine-Westphalia stand to gain much-needed tax revenues, in some cases more than a billion euros.

Germans hold an estimated 150 billion Swiss francs in Swiss accounts. - Reuters

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