German Tax Amnesty May Be Extended Into 2005

by Ulrika Lomas, Tax-News.com, Brussels

18 June 2003

According to a report in the German daily Handelsblatt this week, the government is planning to extend a tax amnesty on undeclared foreign savings accounts originally ending in December next year to March 31 2005.

Under the revised plan, Germans repatriating undeclared investments will have their money taxed at 25% until December 31 2004 with a 35% levy imposed thereafter, in return for escaping any penalties or fines that would otherwise be incurred.

The paper also claimed that German tax inspectors will be able to make random checks on bank accounts they deem suspicious in a bid to pressurise individuals to take part in the amnesty.

Estimates put the amount that Germans have 'hidden' in secret bank accounts in various offshore jurisdictions at around EUR150 billion ($178 billion).

The Finance Ministry is hoping to bring in an additional EUR5 billion in revenues as a result of the amnesty which it is intending to use to help plug a runaway budget deficit. The cabinet is due to give the go ahead to the proposal in a meeting scheduled for today.

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