The German deal was originally agreed in principle in 2011, about 10 days before a similar scheme was approved for the UK, in 2011. The UK version took effect on 1 Jan 2013, and a similar one was adopted around the same time in Austria. The German version, however, was held up on political grounds, and now, it seems, it may never be agreed, at least as conceived initially.
Ingrid Arndt-Brauer, a government official with Chancellor Angela Merkel’s Social Democratic coalition partner, who chairs the Finance Committee in the lower house of parliament, told a Bloomberg journalist in an interview that the deal was “off the table” for good, because “recent cases of tax evasion have resulted in mounting sentiment among Germans that tax evasion is fraud and not mere bagatelle”, Bloomberg reported last night.
“Any revival of the stalled German-Swiss tax deal is off the table,” the news service quotes Arndt-Brauer as saying.
The “death of the tax accord”, as Bloomberg calls it, may risk further clouding relations between Switzerland and Germany, which, it noted, have already been tested by the outcome of a referendum in Switzerland earlier this month to limit immigration from EU countries.
As reported, the deal between the UK and Switzerland was agreed on 24 August 201, and was originally expected to bring in as much as £6bn annually in extra tax revenue. It went live in January of last year.
In September, however, a report published in the Sunday Times quoted accountants familiar with the scheme as saying it was bringing in much less than it had been expected to. The article focussed on an option for those UK taxpayers with undeclared Swiss assets to make a one-off payment to HMRC, to settle any outstanding tax liabilities.
The shortfall “will be an embarrassment to the [UK’s coalition government] at a time when it is clamping down on tax avoidance by rich individuals and companies,” the Sunday Times story said – spelling out what some German politicians may fear their own country’s papers might say, should a similar German scheme, once set up, also fall short of expectations.
A spokesman for HM Revenue & Customs said, in response to the Sunday Times's comments, that it was too soon to be certain yet how much the scheme would bring in, and stressed the importance of remembering that “this is money that, without this groundbreaking agreement, would largely remain untaxed”.
Prominent German tax evaders
German intolerance for tax deals with Swiss banks is said to be a result in part of recent reports in the German media of celebrities with Swiss accounts. They have included Bayern Munich president Uli Hoeness, and a German feminist writer and television personality named Alice Schwarzer, Bloomberg noted in its report.
