Switzerland and Germany completed an accord to end a dispute over tax evasion by wealthy Germans holding cross-border accounts with Swiss private banks.
As part of the settlement, Swiss banks will pay 2 billion Swiss francs ($2.8 billion) to the German government to cover the failure by their clients to disclose undeclared money in the past, the Swiss Finance Ministry said today in a statement. That amount will later be reimbursed to the banks from taxes paid by their customers, the ministry said.
The agreement “not only respects the protection of bank clients’ privacy, but also ensures the implementation of legitimate tax claims,” the Swiss Finance Ministry said.
The tax treaty comes after Switzerland agreed in March 2009 to meet international standards to avoid being blacklisted as a tax haven by the Organization for Economic Cooperation and Development. Relations between Germany and Switzerland soured early last year when German authorities began an investigation into tax evasion based on purchased CDs of stolen bank data.
In due course, Britain can be expected to seek a similar agreement with the Swiss.
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