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Schäuble Insists Tax Disc Ban Is A 'Sideshow'

by Ulrika Lomas, Tax-News.com, Brussels

07 September 2012


German Finance Minister Wolfgang Schäuble has underlined the need to focus on the bilateral tax agreement with Switzerland to resolve the longstanding issue between the two countries of undeclared wealth held by German residents in Swiss banks, rather than banning the purchase of stolen tax data discs.

Alluding to recent calls by German Justice Minister Leutheusser for a new law to be introduced to ban the purchase of illegally obtained tax data discs containing information on German residents alleged to have evaded taxes in the Confederation, Schäuble insisted that the best way is to create the conditions within the framework of the treaty to ensure that such questions no longer arise.

The tax accord will ensure that in future capital deposits located in Switzerland are treated in exactly the same way as capital deposits in Germany, Schäuble explained, stressing that this is the main point and that the Justice Minister’s proposal is merely a "sideshow".

The actual point is that the agreement will serve to guarantee that the problem is resolved without further recourse for the state to collaborate with criminals to enforce tax compliance. Such action is not a satisfactory situation for a legal state in the long term, the minister added.

Schäuble nevertheless conceded that the purchase of the stolen discs is legally justified, and acknowledged that both he and the government have been involved in the difficult decisions.

German Justice Minister Sabine Leutheusser-Schnarrenberger recently called for a new law to ban purchases of stolen CDs containing taxpayer data. The red-green federal state of North Rhine-Westphalia (NRW) has purchased several such discs.

The German Justice Minister's proposal would make it a criminal offence for tax authority officials to buy taxpayer data acquired illegally.

The Justice Minister’s proposal has received little support from other members of the coalition, who remain convinced that the Swiss tax deal must remain the priority.

The plans have also been heavily criticized by the left-wing opposition and the tax authority union (DSTG). The opposition has argued that such a unilateral ban would have an effect equivalent to helping tax evaders without gaining anything in return for the government.

Back in December 2010, and following months of controversy, Germany’s Federal Constitutional Court finally permitted the use of tax information contained on data discs for criminal prosecutions.

The court ruled that information regarding alleged tax evaders, contained on discs provided by informants, may indeed be used during criminal investigations, irrespective of whether or not the original means by which the data was obtained was deemed to be lawful.

TAGS: court | compliance | Finance | tax | tax compliance | law | banking | tax authority | offshore | offshore banking | banking secrecy | Germany | Switzerland

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