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Switzerland May Allow Grouped Requests

by Ulrika Lomas,, Brussels

22 August 2012

By way of a compromise with Germany in the ongoing dispute over the bilateral tax deal between the two countries, Switzerland reportedly now plans to allow so-called ‘grouped’ requests for information based on patterns of behaviour, according to Focus magazine.

The compromise would mark a significant step forward, potentially paving the way for ratification of the long-awaited accord aimed at resolving the issue of undeclared and untaxed assets held by German residents in Swiss banks.

Focus magazine says that the compromise would enable the German tax authorities, with retroactive effect from January 1, 2011, to obtain the names of any German residents electing to relocate their capital from Switzerland abroad prior to entry into force of the tax deal to circumvent the agreement.

A corresponding law is due to be passed by the Swiss parliament in the autumn, in order for the latest provisions to enter into force at the same time as the tax agreement. This would mean that the existing treaty would not have to be either renegotiated or amended.

The extended reporting obligation might be enough to gain support for the agreement from Germany’s Social Democrats (SPD), who have up to now vehemently opposed the deal, arguing that the text contains too many loopholes. The SPD has threatened to veto the accord in the Bundesrat, where the black-yellow coalition government no longer has a majority.

Germany’s Foreign Minister Guido Westerwelle recently called for an end to the controversial purchase by German federal states of Swiss banking data discs, containing the names of German residents suspected of having undeclared Swiss bank accounts, and urged the red-green led states to ratify the tax agreement as quickly as possible.

Adopted at the end of April by the German cabinet, the accord, which has already been modified following significant concessions from Switzerland, aims to ensure the equal treatment of the wealth of German citizens, whether located in Germany or in Switzerland, and to restore tax equity for the past by means of a lump sum tax.

Germany’s coalition government and Chancellor Angela Merkel consider the tax accord with the Confederation to be a suitable way to satisfactorily resolve the difficult, longstanding conflict between the two countries on the issue of banking secrecy.

TAGS: tax | investment | law | banking | offshore | agreements | offshore banking | banking secrecy | Germany | Switzerland

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