German-Swiss disputes on fight against tax evasion

Honestly, I had an interesting Sunday morning over the papers yesterday, looking at the latest German-Swiss tax evasion disputes, and comparing the German coverage of it all with reports and comments from Switzerland.

To cut a long story short, there’s a long history of wealthy Germans (and people from elsewhere) putting money in Swiss bank accounts, with the aim of avoiding tax payments due in their home country. This is not least because the Swiss authorities have never exploited the full potential of legal and supervisory tools to discourage such investors. For example, they don’t regard simple tax evasion (excluding elements of the more serious tax fraud) as an offence serious enough to trigger co-operation with foreign authorities.

 

 

Now, some days ago, someone anonymous offered a CD with 1,500 (apparently stolen) sets of Swiss banking data of German clients to the German government. Without too much hesitation (and relying on debates from a similar case involving Liechtenstein a couple of years ago), the German government decided to buy the CD. It now expects additional tax revenue in the order of EUR400 million.

In the wake of this openness to purchasing (apparently stolen) banking data, more CDs have been offered to more German authorities over the past few days, all of which has sparked an interesting political and legal debate. Does the Swiss economy live off “giving shelter to criminals”? Is it OK for a government to buy illegally collected information? Doesn’t Germany need clearer laws regulating this?

Here’s a couple of newspaper headlines. The German Frankfurter Allgemeine Sonntagszeitung reports how “the hunt for tax evaders continues”. While Neue Züricher Zeitung from Switzerland says it is worried about the German authorities‘ “fatal disregard of [the banking clients’] private sphere” (as always, you can click on the image to see a larger version).

 

 

 

Have a good week –

Boris

 

P.S.: For small daily updates from the world economy, please always feel invited to visit my little Twitter newsfeed.

 

 

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