Germans, Swiss settle tax differences, but spy warrants add twist

ZURICH, SWITZERLAND  – The dust was starting to settle over the tax deal between Switzerland and Germany Friday 30 March when a new whirlwind was kicked up with the Swiss asking for German assistance in charges brought against three German tax inspectors.

The Swiss Federal Tax Office announced late Friday that the German government had confirmed during the day it intends to approve the tax deal, which has caused heated debate in the European Union. Switzerland had asked for clarification of the situation by the end of March in order to put the new agreement into effect at the start of 2013, as planned.

Agreements with Britain and Germany were two of the nearly 40 revised double taxation agreements Switzerland has drawn up with other countries since it agreed to follow OECD recommendations in this area, but they prompted negative reactions from the EU, which threatened to take its two member states to court. Earlier this month the UK and Switzerland signed their deal, which goes into effect in January 2013.

The German agreement is similar to the UK one in that it calls for a withholding tax on income from accounts in Switzerland held by Germans but an important element for the German government is a one-off payment by German citizens on capital in Switzerland to settle past unpaid taxes. The statement by the Swiss did not clarify the amount of the withholding tax, which some media are reporting is still being negotiated.  The treaty that was negotiated and initialed in August 2011, listed as 25 percent at the time.

The German SPD opposition party insists the treaty will have trouble getting approval by the Bundesrat (parliament).

Industrial spying charges add new twist to tax chases

Saturday the Swiss attorney general announced his office has issued arrest warrants for three German tax inspectors who are accused of accepting stolen goods in a case that dates back to February 2010. The three are accused of industrial espionage in accepting bank data offered to them on a CD in 2008.

Reuters cites him as saying in a statement that “There is a concrete suspicion that specific orders from Germany were issued to use espionage to obtain information from Credit Suisse. The attorney general has asked German authorities for assistance.”