German tax refugees 'send billions' to Austria
18 January 2006, VIENNA - German "tax refugees" dodging tough new banking laws at home are taking billions of euros across the border and depositing them in Austrian banks, said the newspaper Die Presse on Wednesday.
18 January 2006
VIENNA - German "tax refugees" dodging tough new banking laws at home are taking billions of euros across the border and depositing them in Austrian banks, said the newspaper Die Presse on Wednesday.
The Banking Cooperative Federation in Germany's Bavaria state estimated that last year alone, two billion euros (2.4 billion dollars) had flowed from its member-banks to Austria.
In Austria, the national bank said there was a total of 11.8 billion euros of German citizens' money in Austrian banks. Added to this was a presumably still higher sum in bonds and stocks.
In the customs-free Tyrolean area of Kleinwalsertal and Jungholz close to the German border, where practically only Germans have bank accounts, there were about eight billion euros, and the amount had risen sharply in the recent past.
In all forms, assets held by private German citizens in Austria were probably 50 billion euros or more.
The outflow from Germany was in reaction to the new "law on encouragement of tax honesty" which went into force last April. It threw private citizens' bank accounts open to scrutiny not only by tax authorities, but also social and employment offices.
All these were allowed to take a look even if there were no concrete grounds for suspicion against the account holders.
For long-term unemployed that could have the undesirable effect that the greater part of their personal finances - including savings for their old age - had to be used up before the state would pay unemployment benefits.
The report said that initially, the "refugees" had taken their money to banks in Switzerland and Liechtenstein. But now a majority were turning to Austria.
Many crossed the open Bavarian-Austrian border with suitcases full of cash, avoiding a bank transfer which might be noticed by the German authorities.
Austria, along with Liechtenstein, Switzerland, Luxembourg and Belgium, has not joined the European system of mutual reporting of foreigners' accounts. That means there is no way of the German authorities finding out details of their citizens' accounts.
Subject: German news