Tuesday, September 13, 2011

Germany may well reject its grubby Swiss tax deal

We are heartened to hear that Germany’s upper house of parliament might reject the draft German-Swiss tax deal initialed on August 10. Some leading Social Democrats oppose the accord. With all SPD-led Bundesländer votes - something that now looks more likely than not, but is by no means certain - they can block legislation in the chamber.

As we have been explaining, this tax deal seriously undermines the European Union's unified struggle for automatic tax information exchange, allowing impunity for criminal tax dodgers and preserving the kind of secrecy that allows for large-scale channeling of other illicit funds.

TJN Germany has blogged on these events. As the blog is written in German, key points are summarised below.

The German daily newspaper Der Spiegel (print article only, no online link, unfortunately) has interviewed Walter Borjans, finance minister of Nordrhein-Westfalen. Borjans states that the German-Swiss tax agreement is scandalous. He points out that tax evasion is a criminal offense that harms the public, and says he will do all he can to prevent these indulgences for tax evaders.

Crucially, Borjans asserts that the deal is unconstitutional.

These statements are supported as reported in
Manager-Magazin, by Social Democrat finance experts Joachim Poss and Nicolette Kressl demanding that the federal Finance Minister Wolfgang Schäuble withdraw the agreement and engage in renewed negotiations with Switzerland. Poss and Kressl point to the example of the USA keeping up the pressure on breaking open Swiss bank secrecy. They assert how rejecting the bilateral German-Swiss deal would support the efforts of the European Union to force Switzerland towards automatic exchange of information.

TJN says a big thank you to all of those whose campaigning has achieved so much positive movement on this. The news from Germany has positive implications, we hope, for what happens next with the equally appalling UK-Swiss deal - see some recent TJN comment on this here, and from Tax Research UK here.

Those trumpeting that these deals resolve the tax havenry issue should open their eyes to the fact that their fig leaves are fast becoming much, much smaller.

For those who speak German, now enjoy this Campact video on the subject.

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