Germany, Switzerland reach preliminary deal to share information on tax

Germany, Switzerland reach tax agreement

BERLIN — Germany and Switzerland said Friday that they have reached a preliminary agreement to exchange information on suspected tax cheats — a key step toward defusing a long-festering irritant in relations.

The two sides initialed a new double-taxation agreement but agreed not to disclose details pending final approval by their governments, expected within “in a few months,” German Finance Minister Wolfgang Schaeuble said.

His Swiss counterpart, Hans-Rudolf Merz, also gave no details but said his country didn’t have to make “exaggerated concessions.”

“We are not interested in untaxed money in our financial center,” Merz said.

Germany has been one of the harshest critics of neighboring Switzerland’s strict banking secrecy laws.

German tax authorities earlier this year purchased a disk containing stolen data on German account holders in Switzerland — infuriating the Alpine nation.

“Switzerland has always said that in such cases, independent of the country, we don’t give legal assistance,” Merz said. “That’s how it will stay — the theft of tax data is a criminal offense in Switzerland and will be in the future too.”

Schaeuble made clear that he isn’t enthusiastic about the idea of an amnesty for German tax offenders, noting that a 2004-5 amnesty fell short of expectations.

That amnesty netted euro1.26 billion ($1.68 billion) — well short of the original goal of euro5 billion.

Schaeuble and Merz set up a working group to examine open questions over taxation in the coming months, and related issues such as improving Swiss banks’ access to the German market. The Swiss Bankers Association called for proposals on that “as soon as possible.”

The group added that Friday’s accord “will help place Swiss-German relations back onto an objective and constructive footing that is worthy of friendly neighboring states.”