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Schäuble Strives To Save Swiss Tax Deal

by Ulrika Lomas, Tax-News.com, Brussels

26 October 2012


Struggling to prevent the legislation from being vetoed in the German Bundesrat, or upper house of parliament, German Finance Minister Wolfgang Schäuble has once again defended the bilateral tax deal brokered with Switzerland, which aims to ensure tax justice for both the past and the future.

In a recent Internet podcast, Schäuble underscored that “a functioning tax agreement” must ensure that the income of every taxpayer in Germany is treated in exactly the same way, irrespective of the country in which that income is realized.

Schäuble insisted that no one should be able to reduce or evade their tax obligations by either manipulating income or concealing assets in another state. The agreement with Switzerland serves to achieve this objective, the minister maintained.

The tax accord negotiated with Switzerland provides for a lump sum tax to be imposed anonymously on hitherto undeclared German assets located in Swiss banks at tax rates of between 21% and 41%. Future capital gains are to be taxed as in Germany under the treaty.

Germany’s Social Democrats (SPD) and Green Party have opposed the treaty from the outset, arguing that the provisions are too lenient. SPD-led states are determined to maintain pressure on tax evaders and intend to purchase tax data discs in future, containing information on German residents with untaxed assets held in Swiss banks.

Concluding, Schäuble warned that the purchase of tax discs is no alternative to a reasonable statutory provision, pointing out that the purchase of illegally obtained information is merely a second best solution. The state must ensure that its laws are implemented without recourse to collaboration with criminals, the minister concluded, noting that this is only possible via the agreement given that Swiss banking secrecy has up to now protected tax fugitives.

TAGS: compliance | tax | tax compliance | tax avoidance | law | banking | offshore | agreements | legislation | banking secrecy | tax rates | withholding tax | Germany | Switzerland

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