Swiss agree German tax evasion pact
April 6, 2012, Friday
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SWITZERLAND has agreed to a new tough bilateral tax evasion treaty that is expected to bring Berlin's state coffers some 10 billion euros (US$13 billion) next year, Germany's Finance Ministry said.
The revised agreement, signed by officials from both countries in Switzerland yesterday, seeks to end a long-running dispute over German tax evaders who keep their money in Swiss bank accounts.
The deal allows Germans with undeclared assets in neighboring Switzerland to escape punishment by making a one-time payment of between 21 and 41 percent of the value of their Swiss-held assets - higher than the 19 percent to 34 percent range initially planned.
As part of the deal, Swiss authorities will calculate and transfer the tax payment to Germany. The agreement also grants German authorities wider scope to seek information on German nationals' accounts in Switzerland.
Due to the secret nature of most assets held by German nationals in Switzerland, it is not entirely clear how much the deal will bring into Berlin's coffers. Switzerland has guaranteed a minimum payment of 2 billion euros, but German officials said they expect a total payout of about 10 billion euros or more next year.
Heirs of German undeclared assets in Switzerland will in future face a 50 percent flat tax unless they chose to declare the estate to German authorities.
Also, there will be a flat withholding tax on capital gains of 26 percent - the same as in Germany - on German residents' wealth in Switzerland.
The revised agreement, signed by officials from both countries in Switzerland yesterday, seeks to end a long-running dispute over German tax evaders who keep their money in Swiss bank accounts.
The deal allows Germans with undeclared assets in neighboring Switzerland to escape punishment by making a one-time payment of between 21 and 41 percent of the value of their Swiss-held assets - higher than the 19 percent to 34 percent range initially planned.
As part of the deal, Swiss authorities will calculate and transfer the tax payment to Germany. The agreement also grants German authorities wider scope to seek information on German nationals' accounts in Switzerland.
Due to the secret nature of most assets held by German nationals in Switzerland, it is not entirely clear how much the deal will bring into Berlin's coffers. Switzerland has guaranteed a minimum payment of 2 billion euros, but German officials said they expect a total payout of about 10 billion euros or more next year.
Heirs of German undeclared assets in Switzerland will in future face a 50 percent flat tax unless they chose to declare the estate to German authorities.
Also, there will be a flat withholding tax on capital gains of 26 percent - the same as in Germany - on German residents' wealth in Switzerland.
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