Switzerland, Germany reach deal to end tax evasion dispute

10th August 2011, Comments 0 comments

Switzerland and Germany reached a deal Wednesday to end a tax evasion dispute over any undeclared assets held by German taxpayers in Swiss banks, the Swiss finance ministry said.

The deal, which is expected to be signed in coming weeks, requires Swiss banks to pay two billion francs (1.91 billion euros, $2.6 billion) to German tax authorities and could snare up to just short of 1,000 tax cheats over two years.

This advance payment would be refunded to Swiss banks if German taxpayers came forward voluntarily to settle the tax due on undeclared assets, the ministry.

German taxpayers will be given a one-off chance to make an anonymous tax payment, with the rate to vary between 19 and 34 percent.

In future, all investment income and capital gains arising from the assets would be covered by a withholding tax of 26.375 percent.

To prevent any new undeclared funds from entering Swiss banks, German authorities would be able to request information on suspected tax cheats.

The number of such requests is expected to reach between 750 to 999 over two years, the ministry said, adding that the accord should be in force by 2013.

© 2011 AFP

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