Print Page
News & Press: International News

Germany Divided On Swiss Tax Deal Renegotiation

Wednesday, 08 May 2013   (0 Comments)
Posted by: Author: Ulrika Lomas
Share |

Source: Ulrika Lomas (, Brussels)

German Finance Minister Wolfgang Schäuble has ruled out the idea of renegotiating the bilateral tax deal with Switzerland, blocked by the German Bundesrat, or upper house of parliament, in December last year.

Schäuble's remarks follow Swiss Federal Councillor Didier Burkhalter's announcement that Switzerland is willing to hold talks with Germany on a new withholding tax agreement between the two countries. Burkhalter made clear that the Confederation would be prepared to look closely at the German Parliament's decision to reject the original tax accord.

As a sovereign state, Switzerland is not able and not willing to retroactively amend its laws or abolish its banking secrecy, Schäuble explained. He made clear that it was precisely on this issue of preserving anonymity that the red-green led federal states decided to veto the initial agreement with the Confederation in the German Parliament. The Opposition's stance has not changed since then, Schäuble emphasized.

Schäuble alluded to Swiss Finance Minister Eveline Widmer-Schlumpf's recent announcement that the Confederation is willing to discuss the idea of an automatic exchange of information. Rather than focusing on concluding bilateral tax accords, the German Government's aim now is to reach a consensus on a general provision for all capital income at European level, which ensures full information exchange, the German Minister revealed.

Finance Minister Schäuble noted that he is currently in ongoing talks with his counterparts from Switzerland, Austria, and Luxembourg, and from other European Union (EU) member states to achieve this objective. In this way, very swift progress is being made, Schäuble said.

In contrast, Germany's Foreign Minister Guido Westerwelle welcomed the Swiss Government’s willingness to engage in a fresh round of talks, underlining the fact that "tax evasion and tax crime are best fought via treaties and agreements." In contrast to Schäuble's remarks, Westerwelle stated that the German Government intends to continue discussions in a "constructive spirit" to reach a diplomatic solution. Several Social Democrat Finance Ministers have also called for fresh talks on a Swiss-German treaty, albeit after the September elections.

German Opposition parties blocked the initial Swiss-German withholding tax agreement in the German Bundesrat at the end of last year. The Social Democrats and Green Party argued that the text was too lenient on tax evaders, rejecting the provision of anonymity, and demanding information on alleged tax evaders.

The original bilateral tax treaty provided for a 25% withholding tax (plus solidarity surcharge) to be imposed from 2013 on capital gains received by German taxpayers with accounts held in Switzerland, ensuring that capital gains realized in Switzerland were in future treated in the same way as in Germany.

The accord also provided for a 50% tax to be imposed on inheritances in Switzerland, unless German residents opted to declare their inheritance to the German tax authorities.

The tax deal also provided for the taxation of hitherto undeclared and untaxed assets held by German taxpayers in the Confederation's banks, at withholding tax rates varying from 21% to 41%.



Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.

  • Tax Practitioner Registration Requirements & FAQ's
  • Rate Our Service

    Membership Management Software Powered by YourMembership  ::  Legal