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SWITZERLAND

Tax men raid hundreds of homes

German authorities launched nationwide raids on suspected tax evaders on Monday, in connection with a probe into several hundred Germany-based clients of Swiss bank giant UBS, a state prosecutor confirmed.

Tax men raid hundreds of homes
Photo: DPA

“We are investigating several hundred domestic clients of Swiss bank UBS on

suspicion of tax evasion,” said Bernd Bienioßek, a prosecutor in the western city of Bochum.

Some 50 tax investigators took part in the nationwide raids earlier on Monday,

Bienioßek said.

The raids were connected to data recovered from six computer discs purchased by the German state of North Rhine-Westphalia (NRW), containing information on 7,000 Germany-based UBS clients suspected of hiding cash from the taxman.

Another public prosecutor in the city of Mannheim said last Thursday they were investigating the German branch of UBS over suspected of tax evasion.

UBS chief Axel Weber, also a former head of the German central bank, said in a interview in August that his bank had “zero tolerance” for tax fraud.

But NRW state premier, Hannelore Kraft, told the Bild daily in September that the recently purchased data indicated 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 came into force.

“UBS does not help customers avoid paying taxes,” said bank spokesman Dominique Gerster. “In 2009, UBS conducted a thorough examination of its cross-border activities and, where it was considered necessary, adapted its rules.”

“Any UBS employee who does not adhere to these rules is punished by measures up to and including dismissal,” he added, and emphasised that the bank “clearly supports the need for its German clients to conform to the tax laws.”

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 from the Greens and the Social Democrats have threatened to block the deal in the German upper house, the Bundesrat.

AFP/DPA/jlb

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MONEY

Where in Germany do people have the highest disposable income?

An economic study has shown huge regional differences in income throughout Germany. So which parts of the country have the most to spend each month, and which are feeling the squeeze?

Where in Germany do people have the highest disposable income?

A study by the Economic and Social Sciences Institute (WSI) of the Hans-Böckler foundation reveals stark regional differences in disposable income in Germany. In some cases, households had as much as double the spending money of those in other parts of the country. 

Here’s where people have the most – and least – disposable income each month.

What is disposable income?

The WSI calculated disposable income as the sum of income from wealth and employment, minus social contributions, income taxes, property taxes and other direct benefits or taxes.

What’s left is the income which private households can either spend on consumer goods or save.

The study, which was based on the most recent available national accounts data for 2019, looked at the disposable income of all of the 401 counties, districts and cities across Germany.

Which regions have the highest and lowest disposable incomes?

The study found that the regions with the highest disposable incomes were in the southern states.

Heilbronn in Baden-Württemberg had the highest disposable income of all 401 German counties and independent cities – with an average per capita disposable income of €42,275. The district of Starnberg in Bayern followed in second place with €38,509.

READ ALSO: REVEALED: How much do employees really earn across Germany’s states?

By comparison, per capita incomes in the cities of Gelsenkirchen and Duisburg in North Rhine-Westphalia were less than half as high, at €17,015 and €17,741 respectively. These regions had the lowest disposable income in the country. 

The study also found that, more than thirty years since German reunification, the eastern regions continue to lag behind those in the west in terms of wages.

According to the WSI, the Potsdam-Mittelmark district is the only district in the former east where the disposable per capita income of €24,127 exceeds the national average of €23,706.

Do regional price differences balance things out?

The study also showed that regionally different price levels contribute to a certain levelling out of disposable incomes, as regions with high incomes also tend to have higher rents and other living costs.

“People then have more money in their wallets, but they cannot afford more to the same extent,” WSI scientist Toralf Pusch explained.

READ ALSO: EXPLAINED: When will Germany raise the minimum wage?

Therefore, incomes in the eastern states, adjusted for purchasing power, are generally somewhat higher than the per capita amounts would suggest.

That could explain why, even after price adjustment, the cities of Gelsenkirchen and Duisburg in western Germany continue to be at the very bottom of the list.

Saxon-Anhalt’s Halle an der Saale, on the other hand, which has an average disposable income of only €18,527, benefits from the lower prices in the east.

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