September 8, 2012 / 2:52 PM / 7 years ago

German opposition says Swiss concession not enough for tax deal

BERLIN/ZURICH, Sept 8 (Reuters) - Germany’s opposition Social Democrats (SPD) would scupper a deal to levy taxes on German assets in Swiss bank account even if Switzerland made concessions to allow back-dated inquiries, a senior member of the party said on Saturday.

Joachim Poss said that even if Switzerland were to backdate its cooperation in hunting tax evaders, it still wouldn’t be enough to sway the SPD into backing the pact.

“Our objections to the pact go beyond people sneaking away money” as the pact begins to come into force, he said. “So nothing has changed in the opinion of the SPD.”

Switzerland and Germany struck a deal in April to clamp down on tax evasion, but the SPD have said they will block it in the upper house of parliament, saying it is too lax. Its opposition to the deal has strained bilateral relations.

One of the SPD’s criticisms has been that, as it stands, the agreement would allow people to evade taxes by taking their money out of Switzerland before the deal takes effect.

Source say Switzerland is working behind the scenes on a back-door way to resuscitate the pact without revisiting negotiations.

To do so, the Swiss government could top up the German deal with so-called group requests, which allow foreign tax authorities to get at data on groups of their citizens holding Swiss bank accounts without knowing their identities.

Under pressure from the Organisation for Economic Co-operation and Development, Switzerland recently agreed to help other countries on group requests.

Sources say a parliamentary commission is set next week to deliberate whether to back-date those requests, which could pave the way for Berlin to claw back money from Germans who have withdrawn funds from Switzerland since the deal surfaced to avoid detection.

But the SPD, which is gearing up for federal elections next year, is insisting on a full re-negotiation of the deal, which it has described as a “cheese with lots of holes where money is sneaking away”.

One of the SPD’s objections to the pact under dispute is that it would allow German account holders to remain anonymous.

SPD leader Sigmar Gabriel, who plans to make criticism of banks a centrepiece of the SPD’s 2013 campaign, said last month Swiss banking practices in Germany were comparable to organised crime.

Berlin says the deal would enable it to net huge sums. Germans hold an estimated 150 billion euros ($184.5 billion) in Swiss accounts.

Chancellor Angela Merkel’s government is hoping that SPD-led regions will ultimately drop their objections and support the deal as it will bring them a huge windfall, although this looks increasingly unlikely. (Reporting By Sarah Marsh in Berlin and Katherine Bart in Zurich; Editing by John Stonestreet)

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