State premier: Buying tax cheat CDs is legal

The German state of North Rhine-Westphalia will continue to buy data on people suspected of stashing assets in Swiss banks to avoid taxes, the state premier was quoted as saying on Sunday.

State premier: Buying tax cheat CDs is legal
Photo: DPA

“Purchasing such data is legal. That has been decided by the highest legal authority. Therefore we will continue to buy such data,” Hannelore Kraft told mass circulation Bild in an article to appear in Monday’s edition.

The data purchased recently indicated that Swiss banks were offering clients tips on how to transfer cash away from Switzerland to Asia before a planned tax deal between the two countries comes into force, said Kraft, according to Bild.

The two neighbours 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.

Switzerland reacted angrily, saying the data were stolen in violation of its banking secrecy laws. As much as €180 billion ($222 billion) in German assets are hidden in Switzerland, according to unconfirmed media reports.

A tax deal between the two countries, aimed at ending such disputes, is to take effect in January 2013 but still needs to be ratified by both parliaments.

The double taxation agreement, signed by ministers earlier this year, would see German citizens with assets parked in Switzerland’s notoriously secretive banks paying a tax rate of 26.4 percent on these holdings.

But opposition lawmakers in the German upper house, the Bundesrat, have threatened to block the deal.

Kraft, from the opposition Social Democrats, reiterated this opposition in her Bild interview.

“We are not against a tax deal in principle. We are against this tax deal,” she said.

“It’s a fundamental question of equality. When this deal comes into force, German tax cheats would remain anonymous, pay less than honest taxpayers and get their unreported income laundered,” added Kraft.


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