• Germany's news in English

Swiss-German tax deal falls through

The Local · 13 Dec 2012, 10:24

Published: 13 Dec 2012 08:57 GMT+01:00
Updated: 13 Dec 2012 10:24 GMT+01:00

Facebook Twitter Google+ reddit

The agreement was scuppered on Wednesday after negotiations between the two chambers of the German parliament - the Bundestag and the Bundesrat - broke down in a parliamentary mediation committee.

The Bundestag, controlled by Chancellor Angela Merkel's centre-right coalition, had voted in favour of the bill, but it was blocked by the Bundesrat, where a centre-left alliance of the Social Democratic Party (SPD) and the Greens holds sway.

The opposition threw the deal out, arguing that it was too lenient on tax evaders.

Under the terms of the agreement, which would have come into effect on January 1, Germans who have parked undeclared assets in Swiss bank accounts would have been able to regularise their holdings while retaining their anonymity.

Swiss banks would have deducted taxes from German clients and transferred the tax revenues to Berlin, allowing the clients to remain anonymous. It was meant to negate the need to buy stolen bank account data from clandestine sources, which many German regional tax offices had resorted to over the past few years.

The mediation committee passed a declaration calling on the government to begin new negotiations "for a fair tax agreement."

Bundestag MP Thomas Strobl, of Merkel's Christian Democratic Union (CDU), said it had been "a difficult session."

The SPD and the Green Party cast doubt on government estimates that the deal would bring in up to €10 billion of tax revenue in 2013 alone. The opposition also criticized the fact that German tax evaders would still have had the chance to get their fortunes out of Switzerland by January 1, 2013.

The Swiss legislature had already passed the agreement, and Eveline Widmer-Schlumpf, President of the Swiss Confederation and head of the Finance Department, expressed regret that Germany had not ratified the deal.

She said the failure meant that "the unsatisfactory status quo with chance finds of illegally appropriated CDs" would have to be maintained for now.

Berlin and Bern 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.

The Local/AFP/DAPD/DPA/bk

The Local (news@thelocal.de)

Facebook Twitter Google+ reddit

Your comments about this article

10:51 December 13, 2012 by whiteriver
after all the news about Germans hiding money in Switzerland I guess anyone who could has already moved their assets out of that country. And it is good that this agreement was blocked as it is unfair with people who don't try to elude the tax office.
Today's headlines
Outrage over ruling on 'brutal' gang rape of teen girl
The now convicted suspects, sitting in court in Hamburg. Photo: DPA.

A 14-year-old girl was gang-raped and left partially clothed and unconscious in freezing temperatures. Now prosecutors are appealing the sentences for the young men found guilty, most of whom will not set foot in jail.

Dozens of Turkish diplomats apply for asylum in Germany
Demonstrators holding a giant Turkish flag protest against the attempted coup in Istanbul in July. Photo: DPA.

Since the failed putsch attempt in Turkey in July, Germany has received 35 asylum applications from people with Turkish diplomatic passports, the Interior Ministry confirmed on Wednesday.

Hertha Berlin fan club criticised for 'anti-gay banner'
Hertha BSC beat FC Cologne 2-1. Photo: DPA

A 50 metre fan banner apparently mocking the idea of gay adoption has overshadowed Hertha BSC's win in the Bundesliga.

Germany stalls Chinese takeover of tech firm Aixtron
Aixtron headquarters in Herzogenrath. Photo: DPA

The German government on Monday said it had withdrawn approval for a Chinese firm to acquire Aixtron, a supplier to the semiconductor industry, amid growing unease over Chinese investment in German companies.

Politicians call for tough sentences for 'killer clowns'
File photo: DPA.

Now that the so-called 'killer clown' craze has spread from the US to Germany, elected officials are drawing a hard line against such "pranks", with some threatening offenders with jail time of up to a year.

Nearly one in ten Germans are severely disabled
Photo: DPA

New figures reveal that 9.3 percent of the German population last year were considered severely disabled.

The Local List
Germany's top 10 most surreal sites to visit
The Upside-Down House, in Mecklenburg–Western Pomerania. Photo: Olaf Meister / Wikimedia Commons

From upside-down houses on Baltic islands to a fairy-tale castle near the Austrian border, Germany is a treasure trove of the extraordinary.

Bavarian critics back Merkel for Chancellor again
Photo: DPA

The Christian Social Union (CSU) have long delayed backing Angela Merkel as their candidate for Chancellor in next year's general election. But now key leaders are supporting her publicly.

Four taken to hospital after hotel toilet bursts into flames
File photo: DPA.

Four guests at a Nuremberg hotel were taken to hospital due to smoke inhalation early Monday morning after a toilet there burst into flames.

Creepy clown scare spreads to Germany
Two of the clowns were apparently equipped with chainsaws. Photo: Pedro Pardo / AFP file picture

Police said Friday five incidents involving so-called scary clowns had occurred in two north German towns, including one assailant who hit a man with a baseball bat, amid fears that Halloween could spark a rash of similar attacks.

10 things you never knew about socialist East Germany
Sponsored Article
Last chance to vote absentee in the US elections
How Germans fell in love with America's favourite squash
How I ditched London for Berlin and became a published author
12 clever German idioms that'll make you sound like a pro
23 fascinating facts you never knew about Berlin
9 unmissable events to check out in Germany this October
10 things you never knew about German reunification
10 things you're sure to notice after an Oktoberfest visit
Germany's 10 most Instagram-able places
15 pics that prove Germany is absolutely enchanting in autumn
10 German films you have to watch before you die
6 things about Munich that’ll stay with you forever
10 pieces of German slang you'll never learn in class
Ouch! Naked swimmer hospitalized after angler hooks his penis
Six reasons why Berlin is now known as 'the failed city'
15 tell-tale signs you’ll never quite master German
7 American habits that make Germans very, very uncomfortable
Story of a fugitive cow who outwitted police for weeks before capture
Eleven famous Germans with surnames that'll make your sides split
The best ways to get a visa as an American in Germany
jobs available
Toytown Germany
Germany's English-speaking crowd