German tax cheat deal blocked
A new agreement with Switzerland aimed at ending a long-running dispute over German tax cheats who hide their money in Swiss banks, has been blocked by Germany’s upper house of Parliament.
The deal would have allowed Germans with undeclared assets in Switzerland to escape punishment by making a one-time payment of between 21% and 41% of the value of their Swiss-held assets. German authorities were also to be given more powers to seek information on German nationals’ accounts in Switzerland.
However, ahead of the vote in the upper house – where Germany’s 16 states are represented and Chancellor Angela Merkel’s centre-right government lacks a majority – politicians from the Social Democrat and Green parties said the deal was not tough enough.
The Swiss Bankers Association criticised the vote, saying it “has missed a major opportunity to reach a fair, optimum and sustainable solution for all parties”.
Finance Ministry spokesman Martin Kotthaus told reporters that the agreement had been the product of lengthy and complicated negotiations but that the government would try to determine if changes could be made to satisfy all sides.
France, whose tax treaty with Switzerland dates to 1952, is also renegotiating an accord to catch tax evaders. The country’s Socialist government has promised to tax the ultra-wealthy at a rate of 75% on earnings above €1m, and sees its Alpine neighbour as a haven for citizens trying to avoid paying their share.
Switzerland has also ratified tax agreements with Britain and Austria and is in negotiations with Italy and Greece.
