German state could buy data even under tax deal, official says

ZURICH Sun Aug 12, 2012 8:47pm IST

Related Topics

Stocks

   

ZURICH (Reuters) - Authorities in North Rhine-Westphalia would buy more leaked Swiss bank data on wealthy Germans seeking to dodge taxes even if a tax pact with Switzerland banning such purchases comes into effect, the German state's finance minister said in a newspaper interview.

Under the pact, German account holders would remain anonymous but Switzerland would impose a retroactive withholding tax on capital in offshore bank accounts and would tax future interest income from those accounts.

"We have indications that money may be flowing into structures which aren't subject to the withholding tax. Swiss banks are very efficient," Norbert Walter-Borjans, finance minister of Social Democrat-run North Rhine-Westphalia (NRW), said in an interview published by Swiss weekly Sonntagszeitung on Sunday.

UBS (UBSN.VX), which according to media reports is one of the banks hit by leaked data bought by NRW, denied on Friday it had advised clients to move money in order to avoid detection by tax authorities.

"In an emergency, we will purchase more data," Walter-Borjans said, when asked whether NRW would buy data if a German-Swiss withholding tax deal, which he has vowed to fight, were to pass.

Walter-Borjans said he was convinced the pact would fail when put to German states and should instead be renegotiated with more favorable terms for Germany.

Walter-Borjan's comments, which came as prominent fellow Social Democrat Sigmar Gabriel likened Swiss banking to organized crime, highlighted that a tax deal agreed by the German and Swiss governments is far from certain to be ratified in time to come into effect next year.

The NRW town of Wuppertal bought one compact disc of UBS data, and Aachen also purchased a CD with Swiss banking data, the Financial Times Deutschland wrote last week. It quoted an insider as saying the UBS data was hefty and included the foundations that helped German clients avoid taxes as well as "big names".

The mining of data purchased from whistleblowers has escalated tensions between Switzerland and Germany over tax evasion.

It also has threatened Switzerland's strategy to make Germany the cornerstone of further withholding tax deals that the Swiss government is seeking to offset pressure for crackdowns on tax dodging, while salvaging secrecy.

Privacy is crucial to Switzerland's $2 trillion offshore wealth management industry. The country has clinched withholding tax deals with Great Britain and Austria as an alternative to automatic exchange of bank information. (Reporting By Katharina Bart, editing by Jane Baird)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Pharma

REUTERS SHOWCASE

Jan Dhan Yojna

Jan Dhan Yojna

Modi: Banking for all to end "financial untouchability".  Full Article 

Power Outage

Power Outage

India may face blackouts as coal shortage cuts power output  Full Article 

Moody's on Inflation

Moody's on Inflation

Persistent inflation hurting India's sovereign ratings - Moody's  Full Article 

Tracking Monsoon

Tracking Monsoon

Monsoon forecast to be better for crops next week  Full Article 

Carmichael Project

Carmichael Project

Adani buys Australia coal mine royalty rights from Linc for $145 million  Full Article 

GDP Preview

GDP Preview

Economy likely grew faster in June quarter: Reuters poll.  Full Article 

India-Japan Meet

India-Japan Meet

Modi eyes breakthrough nuclear pact on Japan trip   Full Article 

Monetary Policy

Monetary Policy

BofA says RBI may cut rates by 75-100 bps starting early 2015  Full Article 

Rare Earth Output

Rare Earth Output

India to chip in with 5 pct of global rare earth output  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage