German Mediation Committee Rejected Tax Deal with Switzerland

German Mediation Committee Rejected Tax Deal with Switzerland

Germany’s parliamentary mediation committee, containing members of both houses, has not reached a compromise on the tax deal with Switzerland aimed to deal with undeclared German assets held in Swiss banks.

Instead of that, the mediation committee called for the government to initiate a new round of talks with Switzerland to negotiate "a fair agreement," insisting that the current version of tax treaty with Switzerland should not benefit German tax evaders. According to the committee, a higher tax must be imposed on those who have evaded their tax obligations.

The Swiss President Eveline Widmer-Schlumpf expressed regret about Germany has not ratified the withholding tax agreement signed between two countries. The Swiss Federal Department of Finance says that without an agreement a considerable proportion of the German assets will stay undeclared and not taxed.

Switzerland intends to bring the withholding tax agreements with the UK and Austria into force on January 01, 2013. The Federal Department of Finance reckons it will be shown that such agreements can be successfully applied in practice.

Currently Switzerland is negotiating similar agreements with Greece and Italy. Other countries also show an interest, for the  Swiss withholding tax model ensures that no untaxed foreign money can be hidden in Switzerland.

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