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Germany Eyes Tax Deal With Singapore

by Ulrika Lomas,, Brussels

09 October 2012

During an upcoming visit to Asia, German Finance Minister Wolfgang Schäuble intends to negotiate a bilateral agreement with Singapore pertaining to the exchange of tax information between the two countries, according to the German finance ministry.

Plans to update and to revise the existing double taxation agreement (DTA) with Singapore, by aligning provisions with the latest international developments and Organization for Economic Cooperation and Development standards, form an important part of global action against tax evasion, the German ministry explains, highlighting the fact that the main aim is to improve information exchange in tax matters.

The ministry underlined its optimism regarding the chances of negotiating a new accord, emphasizing Singapore’s declared “white money strategy”.

Schäuble’s Singapore plans are to be seen within the context of the negotiated German-Swiss tax treaty, due to enter into force on January 1, 2013. Reports suggest that banks in the Confederation have urgently advised their German clients to swiftly transfer their untaxed assets to Singapore, thereby escaping the clutches of the German tax authorities when the provisions apply. Swiss banks have vehemently denied the allegations, however.

The tax agreement with Switzerland provides notably for the taxation of the hitherto undeclared and untaxed assets of German residents held in Swiss accounts as well as for the equal tax treatment of future income from the capital deposits of German taxpayers at the same rates as levied in Germany.

Although Germany’s main opposition parties the Social Democrats and the Green Party have opposed the accord from the outset, threatening to veto the text in the Bundesrat, or upper house of parliament, where the black-yellow coalition no longer has a majority, Rhineland-Palatinate’s Prime Minister Kurt Beck recently indicated that further negotiations could avert a disaster. The vote in the Bundesrat has reportedly been postponed until the end of November to facilitate ongoing cross-party discussions.

TAGS: Finance | tax | investment | offshore confidentiality | double tax agreement (DTA) | banking | international financial centres (IFC) | Organisation for Economic Co-operation and Development (OECD) | Singapore | offshore | agreements | banking secrecy | Germany | Switzerland | standards

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