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Switzerland close to German tax deal

Zurich, October 22, 2010

Switzerland and Germany have agreed the outlines of a deal for a withholding tax on billions of euros held in secret Swiss accounts and want to finalise details this month, a top official was quoted as saying.

Michael Ambuehl, the top Swiss negotiator for international financial affairs, told Thursday's Swiss daily Tages-Anzeiger he hoped a deal could be signed by the end of the month.

'There are no concrete figures yet, but we have agreed with Germany on principles and formulas which have to be fleshed out in negotiations,' he said.

Both Berlin and Berne rejected a weekend report that they had agreed on details of a withholding tax on hidden German assets - estimated at 200 billion euros ($278.5 billion) - that would yield 30 billion euros for Berlin's stretched public coffers.

Ambuehl, who also negotiated a deal last year to end a bruising U.S. tax investigation into top Swiss bank UBS, said Switzerland had persuaded Germany of the merits of a withholding tax but gave no further details.

Some media reports have suggested a withholding tax as high as 35 percent could be imposed although Swiss officials expect the tax to be set at the same level as the 25 percent Germany has for capital gains and profit from share sales.

A withholding tax means the Swiss will not automatically share account information with Germany, preserving the bank privacy that has been crucial to building up Switzerland's $2 trillion offshore wealth management industry.

Ambuel said the deal aimed to solved the problem of existing untaxed assets as well as how new deposits would be taxed, more access for Swiss banks to the German market and the vexed issue of Germany's purchase of Swiss account data from informants.

Berlin has paid for stolen data from Swiss banks to catch tax cheats and raided the German offices of Switzerland's No.2 bank Credit Suisse earlier this year.

Credit Suisse chief executive Brady Dougan, whose bank reported results on Thursday, said resolving tax matters would ultimately be good for the bank's business and for Switzerland.-Reuters




Tags: Germany | Switzerland | tax deal |

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