Germany to Bring Tax Talk to the Swiss

August 7, 2009 International Tax CooperationOffshore BankingTaxation in GermanyTaxation in Switzerland  No comments

Germany will start tax agreement negotiations with Switzerland later this month in an effort to combat the ever more prominent problem of tax evasion.

Germany is looking to make some headway with the problem of German nationals utilizing Swiss banking to avoid their full tax liabilities. According to Peer Steinbrueck, German Finance minister, Germans have a “triple-digit billion-euro amount” hidden away in offshore accounts throughout the world, and Swiss bank accounts make up a significant portion of this.

Germany and Switzerland will engage in rounds of tax agreement negotiations later in August. Most likely these will work towards the signing of an OECD created Tax Information Exchange Agreement (TIEA). German officials have made claims that Switzerland has repeatedly failed to comply with internationally agreed information standards. This places Germany in the upper hand during these negotiations as it still allows for the threat of placing Switzerland on the OECD list of non-cooperative countries.

The negotiations come as part of Germany’s movement towards increasing compliance in a time when many of the world’s economies are projecting budget deficits. Chancellor Angela Merkel’s Government has recently backed new rules which state that any company which has business with a non-complying jurisdiction must provide higher levels of documentation, or face possible tax disadvantages.

Tags:  

Leave a reply