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Germany restrained on Swiss tax inspector probe

April 2, 2012
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BERLIN—The German government said Monday that a Swiss decision to issue arrest warrants for three German tax inspectors hasn't damaged relations between the two countries, and insisted it illustrates the need to get a stalled deal on tax evasion approved.

Germany's center-left opposition condemned the Swiss move when word of it emerged over the weekend. It is part of an investigation into German authorities' 2010 purchase of a compact disc containing data on suspected tax cheats.

But the government noted that the two countries have different laws regarding tax evasion and bank secrecy. It argued the problem would be resolved -- and Swiss legal proceedings against the tax inspectors ended -- by the planned deal to end a long-running dispute over German tax evaders. That deal, negotiated last year, is being held up by German opposition objections.

Steffen Seibert, spokesman for Chancellor Angela Merkel, sought to downplay suggestions that relations between the two countries were strained.

"She sees, as does the whole government, that there are questions that have been unresolved for decades between Germany and Switzerland, and so there are good reasons to have this tax agreement take effect on Jan. 1, 2013," Seibert told reporters.

The deal would allow Germans with undeclared assets in neighboring Switzerland to escape punishment by making a one-time payment, and imposes a flat withholding tax on capital gains in the future on German residents' wealth in Switzerland.

It needs approval from Parliament's upper house, which represents Germany's 16 states and where Merkel's government lacks a majority. That means the government needs support from states governed by the opposition Social Democrats.

However, they want tougher terms than originally negotiated and still aren't satisfied with changes proposed by Switzerland.

The tax inspectors targeted by Swiss prosecutors in their investigation of alleged economic espionage regarding stolen data from Credit Suisse come from the opposition-run state of North Rhine-Westphalia, which holds regional elections on May 13.

State governor Hannelore Kraft has described the Swiss move, which would mean the inspectors might risk arrest if they tried to enter Switzerland, as "monstrous."

A senior Social Democratic lawmaker, Thomas Oppermann, told Germany's Bild newspaper Monday that the government should offer the tax inspectors the country's highest decoration, the Bundesverdienstkreuz.

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