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SPD Open To Reviving Germany Switzerland Tax Deal

by Ulrika Lomas,, Brussels

05 November 2013

Marking a huge about-turn and substantial concession during ongoing Grand Coalition discussions, Germany's Social Democrats (SPD) have indicated that the party might be prepared to renegotiate the bilateral tax agreement concluded with Switzerland, aimed at resolving the longstanding issue of German residents with undeclared bank accounts held in the Confederation. The SPD and the Green Party blocked the initial tax deal in the German Bundesrat, or upper house of parliament, at the beginning of the year.

In an interview with Der Spiegel, North Rhine-Westphalia's Finance Minister and SPD negotiator Norbert Walter-Borjans explained that although the party remains committed to the idea of an automatic exchange of banking information, bilateral accords could "make sense" along the way to achieving this objective.

Walter-Borjans nevertheless made clear that a new treaty between the two countries must be fairer and serve to close existing loopholes. Furthermore, the overarching aim of ensuring that the country's tax authorities gain access to relevant tax information must not be undermined, he emphasized. Here, the Minister underscored that the reason for the failure of the initial text in parliament was the inclusion of provisions guaranteeing anonymity and banning the future purchase of tax data discs.

Commenting, Swiss President Ueli Maurer said that while he supports the idea of new "confidential" round table negotiations, no progress will be made if both sides constantly make public their demands. Alluding to the fact that Switzerland has already made far-reaching concessions, Maurer hinted that it is now Germany's turn to bend. Concluding, Maurer reiterated that although Switzerland has not ruled out the idea of an automatic exchange of information in tax matters, it would be on condition that the mechanism has become the international standard, and is applied in rival jurisdictions, including Singapore. Switzerland must not be put under pressure, however, Maurer warned.

TAGS: compliance | Finance | tax | tax compliance | tax avoidance | banking | Singapore | agreements | Germany | Switzerland | individual income tax | Tax | Tax Evasion

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