Swiss-German tax accord is dead and buried’ say critics

A proposed Swiss-German tax accord is dead and buried amid growing public opposition in Germany to any deal that is seen as too easy on evaders, senior members of chancellor Angela Merkel’s coalition said.

“Recent cases of tax evasion have resulted in mounting sentiment among Germans that evasion is fraud and not mere bagatelle,” said Ingrid Arndt-Brauer, a lawmaker with Merkel’s Social Democratic coalition partner who chairs the finance committee in the lower house of parliament.

“Any revival of the stalled German-Swiss tax deal is off the table.”

The death of the tax accord risks further clouding relations between the neighbours already tested by the Swiss decision in a referendum on February 9 to limit immigration from EU countries, including Germany.

Neither Merkel nor Swiss president Didier Burkhalter referred to tax matters after talks in Berlin yesterday. She instead cautioned against any rush to penalise Switzerland over the immigration vote that will take three years to implement.

A withholding tax deal with Switzerland failed in 2012 when the Social Democrats blocked its passage in Germany’s upper house of parliament, the Bundesrat.

Similar to Swiss accords signed with Austria and the UK, it would have preserved client anonymity while allowing tax to be clawed back.

While the Social Democrats are now in government and able to negotiate a fresh deal, their willingness to do so has evaporated along with revelations of tax dodging by prominent Germans, Arndt-Brauer said.

Combating tax evasion figured prominently in the German election campaign last year after Bayern Munich president Uli Hoeness reported illicit tax holdings in Switzerland in a bid for amnesty.


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