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Swiss Bankers Defend German Tax Deal

by Ulrika Lomas,, Brussels

15 November 2012

Swiss banks have vehemently refuted claims by Germany’s main opposition parties that alleged German tax evaders are transferring their assets en masse to other so-called “tax havens”, jurisdictions deemed to be uncooperative in tax matters, before the bilateral tax agreement enters into force at the beginning of 2013.

According to the President of the Swiss Bankers Association (SBA) Patrick Odier, only around 0.4% of German wealth has flowed to other states located outside of the European Union over the course of the last twelve months. Odier claimed that most German residents are relieved that the matter will finally be resolved, maintaining that hardly anyone is now looking for a tax haven.

Contradicting claims from the German state of North Rhine-Westphalia that the majority of German tax evaders will merely pay a small payment on their wealth, Odier cited banking data showing that the average tax rate for the payment due is 25% of wealth. Taxpayers with EUR1m (USD1.27m) in assets will therefore be required to pay on average EUR250,000, Odier pointed out, adding that this is not an insignificant sum and indeed substantially more than would be due following the submission of a voluntary declaration to the German tax authorities in 95% of all cases.

Odier warned German opposition parties, the Social Democrats (SPD) and the Green Party not to veto the tax accord in the Bundesrat, Germany’s upper house of parliament, arguing that the greater the delay, the more tax crimes will be perpetrated and the less money will flow to Germany.

Concluding his remarks, Odier stressed that Switzerland has drawn a line under the past, as it no longer wishes to accept one single cent of “black money”.

At the beginning of the month, the SBA issued a statement underscoring that the tax agreements negotiated with Switzerland’s key economic partners, notably Germany, the UK, and Austria, “offer a unique historical opportunity to draw a final stroke under the past and to manage the bilateral tax disputes fairly and definitively”.

The German Bundesrat is due to vote on the tax treaty with Switzerland on November 23. The SPD and the Green Party remain opposed to the text and remain determined to reject the accord in the upper house, where the ruling black-yellow coalition government no longer has a majority.

TAGS: compliance | tax | investment | offshore confidentiality | tax compliance | tax avoidance | banking | offshore | agreements | offshore banking | banking secrecy | withholding tax | Germany | Switzerland

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