Tax treaty with Germany could still be signed by Merz

HSBC bank in Geneva

Bern, Switzerland (GenevaLunch) – The double taxation treaty between Germany and Switzerland may be signed by Federal Councellor Hans-Rudolf Merz before he steps down this month.

The agreement with Germany, whose citizens hold more money in Swiss banks than those of any other nation, has led to frequent friction between the two countries, as Germany attempts to claw back undeclared money in secret Swiss bank accounts.

The Swiss have been particularly troubled by several cases of theft of bank client details, which have then found their way into the hands of foreign tax authorities.

One of the ideas originally floated by the Swiss side was an anonymous tax on all foreign-held bank accounts in Switzerland, which would then be handed over to the foreign tax authorities. Account-holders who declare their assets to their home countries could expect to have the tax returned; the others would forfeit the amount. The idea was originally refused by the then German finance minister, but negotiators have been taking another look at it.

The Swiss Federal Council in September ruled that foreign governments asking for administrative assistance in tax evasion cases will not be able to rely on stolen data.

Earlier this year a French employee of HSCB Bank in Geneva reportedly sold a CD with 79,000 client names and details to the French tax authorities, who have since passed on the names of more than 1,000 names to the Canadian authorities, according to AFP.

A man was found dead in his cell in a prison in Bern 1 October, most likely a suicide. He was being held as a suspect in the theft from a Swiss bank of client data and its subsequent sale to the German tax authorities.

Background: GenevaLunch

Links to other sites: AFP, Bloomberg, Nasdaq News, NZZ (Ger)