Brussels, 11/04/2012 (Agence Europe) - The 5 April savings tax agreement between Switzerland and Germany (see EUROPE 10590), with tougher taxation of cash deposited in Switzerland by German taxpayers while allowing them to keep their bank accounts secret from the German tax authorities, has been severely criticised ahead of ratification by the parliaments of the two countries. It is unlikely that Germany will ratify it under the present circumstances, which will give the European Commission greater room for manoeuvre in its negotiations on a new savings tax law within the EU and new savings tax agreements with tax havens. It will also help the Commission in its talks on adjusting existing tax deals between Switzerland and individual member states to bring them in line with EU legislation.
The 5 April tax deal between Germany and Switzerland introduces stricter conditions than last August's deal between the two countries (see EUROPE 10450). German taxpayers will, under the new deal, have to pay a set fee of between 21% and 41% on their savings, rather than between 19% and 34% under the old deal. From 1 January 2013, they will have to pay the same tax as they would in Germany (26.375%), which Swiss banks will deduct at source so that the Germans can continue to keep their bank accounts secret from the German tax authorities and therefore avoid any legal proceedings. People living in Germany and inheriting cash in Swiss bank accounts will be able to pay a 50% inheritance tax or, alternatively, declare the Swiss bank accounts to the German tax authorities.
The Christian Democrat German finance minister, Wolfgang Schauble, said the new deal was balanced, but it has been severely criticised by the Greens and Social Democrats, who are in the majority in the Bundesrat (the higher chamber, representing the German Länder - regions) and whose vote is needed to ratify the deal. The Social Democrats say it would be irresponsible to go along with a deal that amounts to a slap in the face to honest taxpayers and which, if it came into force in 2013, would leave many months for the German taxpayers with secret bank accounts in Switzerland to transfer their savings to other tax havens. The Greens criticise the deal for allowing fraudsters to remain anonymous and not even giving the German tax authorities the same rights as held by the US tax authorities under Swiss legislation in this domain. It is therefore unlikely that the deal will be approved by the Bundesrat.
In Switzerland, the deal has been criticised by a right-wing nationalist movement called “Action pour une Suisse Indépendante et Neutre” as amounting to Switzerland sacrificing national sovereignty and legislation by allowing German tax officials to verify, in Switzerland, that Swiss banks are respecting the deal. Shortly after the 5 April deal was announced, Switzerland issued an international arrest warrant against three German tax officials who had come to carry out tax investigations in Switzerland under cover of darkness. (FG/transl.fl)