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Bundesrat blocks Swiss-German tax deal

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Photo: DPA
11:52 CET+01:00
German lawmakers in the upper house of parliament rejected on Friday a deal on the taxation of German assets parked in Swiss bank accounts.

The deal negotiated by Berlin and Bern would see Swiss banks deduct taxes from German clients and transfer the tax revenues to Berlin, allowing the clients to remain anonymous.

It was due to take effect in January 2013 but needs to be ratified by both parliamentary chambers.

Germany's lower house has already approved it but members of the opposition in the upper house, the Bundesrat, had already threatened to block the deal which they see as being too soft on tax-dodgers.

Finance Minister of North Rhine-Westphalia Norbert Walter-Borjans, of the main opposition Social Democrats, told the Bundesrat it was a deal which made "honest taxpayers feel like fools".

But German Finance Minister Wolfgang Schäuble called for backing for the

deal, saying: "The agreement tries to find a better solution for a situation

which is unsatisfactory."

Neighbours Germany and Switzerland have been embroiled in a spat over tax since 2010 when German authorities raided branches of Credit Suisse bank in 13 German cities after buying data on suspected tax frauds.

Story continues below…

Switzerland reacted angrily, saying the data were stolen in violation of its banking secrecy laws. As much as €180 billion in German assets are hidden in Switzerland, according to unconfirmed media reports.

AFP/bk

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