Germany wants changes to Swiss tax deal

The German finance ministry has confirmed it wants “adaptations” to a deal signed with Switzerland last year aimed at preventing citizens dodging taxes.

A ministry spokesman said on Monday that any discussions would centre on changes to the text. No details were given.

The accord, which has not yet been ratified by Germany, has been under threat after German opposition parties said it was too soft on tax evaders who had stashed an estimated SFr150 billion ($163 billion) in secret accounts.

The Social Democrat and Green finance ministers of the federal states have also come out against the deal, threatening to sink it in the Senate where they are represented.

Under the accord, effective from next year, existing funds in Swiss banks will be taxed at a rate of between 19 per cent and 34 per cent, based on how long the money has been stashed away and the rate of capital gains.

Future investment income and capital gains will be taxed at 26.375 per cent. However the states say they want that rate to be 35 per cent, comparable with German levels.

Swiss banks will pay SFr2 billion up front to Germany within 25 days of the deal being ratified. A provision prevents tax dodgers from moving their funds to another safe haven.