Germans and Swiss Reach Stricter Deal on Tax Cheats
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Switzerland agreed Thursday to a revised tax deal with Germany under which it would pay billions of dollars on funds hidden in its banks by German tax dodgers, the latest step in an international charm offensive that is meant to salvage at least some of the country’s famous banking secrecy, the International Herald Tribune reported. The accord , which was made tougher after a September deal was criticized by the German opposition and officials in Brussels, provides for the assessment of a one-time charge of 21 percent to 41 percent of the value of secret German accounts, higher than the original agreement of 19 percent to 34 percent. Swiss banks that are home to such accounts would make payments to the German government. Anyone inheriting such an account will have to either pay a 50 percent tax or disclose its existence to the German authorities. And henceforth, taxes on investment income will be withheld at the standard German rate. Crucially, from the point of view of maintaining Swiss banking secrecy, account holders’ names will not be revealed to Berlin, and the Swiss authorities will be responsible for ensuring that taxes are paid on behalf of the account holder, who can remain anonymous if desired. The German Finance Ministry estimated that a one-time payment of back taxes could bring it a windfall of up to €10 billion, or $13 billion, with annual payments of €750 million a year thereafter. Read more. (Subscription required.)