Hot tax row between Germany and Switzerland

Here are only a few samples of what has become front page news in Germany, generating hundreds of newspaper articles. Deutsche Welle reports that a number of offers have been made to German authorities on Swiss banking data, although buying stolen data is also politically controversial in Germany: Luft für Steuersünder wird dünner (6 February 2010). Sueddeutsche.de basically tells the same story, adding a few details: Steuerdaten – jetzt prüft auch Bayern (7 February 2010).



According to Welt Online the meagre public information about stolen bank data was sufficient to start a wave of self-incriminatory reports to German tax authorities. About 50 tax evaders had already given themselves in: Verwirrspiel mit System (7 February 2010).


If the story is big in Germany, in Switzerland the breach of the sacred banking secrecy and the potential loss of banking business for wealthy clients has reached almost existential proportions. On 6 and 7 February NZZ Online was practically dominated by different aspects of the issue:

Wiederstand gegen Handel mit gestohlenen Daten regt sich

Auch bayerische Behörden auf der Spur von Steuersündern

Neue CD mit Bankdaten aufgetaucht

„Wir müssen den Mut haben, solchen Fragen jetzt zu stellen“(interesting interview with Hans-Rudolf Merz, Minister of Finance, weighing Switzerland’s responses to the mounting pressure: OECD double taxation agreements; cost of market access versus defiance of EU norms)

„Bern hat den Kopf verloren“ (Konrad Hummler, President of Swiss Private Bankers‘ Association accuses the government of losing ist head)

Wolfgang Schäuble: „Das Bankgeheimnis ist am Ende“ (German Finance Minister ringing the death knell of banking secrecy)

„ Drakonische Strafen – Gewalttäter sind besser dran als Steuersünder (draconic justice for tax fraudsters in Germany – worse than for violent robbers)

Nun droht ein Banksterben (the less than rosy future of a banking sector dependent on market access and business globally)




Ralf Grahn







P.S. If the EU member states continue to pursue their narrow interests in foreign, security and defence policies, the face marginalisation in global affairs.

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Tax matters for Switzerland and the European Union

The basic positions on tax could hardly be more different: virtuous tax competition or criminal tax fraud?




The official Swiss view is that tax competition is healthy. Not only do federalism and [direct] democracy promote sound public finances, but they also enhance trust between citizens and the state, said then President of the Confederation (Bundespräsident) Hans-Rudolf Merz in a lyrical speech 2 November 2009: Die Schweiz im internationalen Steuerwettbewerb.



European Union



The Communication by the European Commission Promoting Good Governance in Tax Matters; Brussels, 28.4.2009 COM(2009) 201 final takes almost the contrary position, calling for urgent action to stem tax fraud and evasion through coordinated action:

The European Union and its Member States face serious challenges in addressing the current economic and financial crisis. The crisis has exacerbated concerns about the sustainability of tax systems in the face of globalisation. The promotion of good governance in the tax area on as broad a geographical basis as possible is now recognised to be the appropriate way of addressing these concerns. It balances the tax sovereignty of individual countries with the legitimate protection of tax revenues.

Accordingly, the EU and its partners have a strong common interest at this time in promoting tax cooperation and common standards on as wide a geographical basis as possible. The time is now right for Member States and third countries to work together and to encourage and support the move that has now started towards a broader acceptance of international standards of tax co-operation

This Communication presents for consideration a series of steps to promote good governance in the tax area, entailing action both within and outside the EU and both at EU and at individual Member State levels. ---

A few days ago, in the European Parliament, the Committee on Economic and Monetary Affairs overwhelmingly voted on a report (A7-0007/2010) on promoting good governance in tax matters, echoing calls for resolute action. (Procedure (2009/2174(INI)); rapporteur: Leonardo Domenici).




The third major political EU institution is the Council. In the pipeline is a draft Council decision (document 16308/09; only partially declassified 6 January 2010) to authorise the Commission to open negotiations between the EU and its member states with the Swiss Confederation to combat direct tax fraud and direct tax evasion and to ensure administrative cooperation through exchange of information on tax matters. (Negotiations are also foreseen with Andorra, Monaco and San Marino.)



Switzerland and Germany


There are also bilateral issues between individual EU member states and Switzerland. The most visible right now is the potential circumvention of the legendary Swiss banking secrecy contemplated by Germany through buying stolen bank data.



In the press release Federal Council takes decision on further course of action concerning Germany (3 February 2010), the Swiss executive stated that it is not willing to provide administrative assistance to Germany based on stolen bank data, but it is willing to continue negotiations on a new double taxation agreement (DTA), in accordance with the OECD Model Tax Convention.




The Swiss decision comes as a reaction to German reports. According to Deutsche Welle the German government is likely to buy stolen bank data on possible tax evaders: Germany willing to pay for secret Swiss bank data (1 February 2010).



As we see, there are contentious issues between the European Union and its member states, on the one hand, and Switzerland, on the other hand.







Ralf Grahn







P.S. The BBC’s Europe editor Gavin Hewitt writes a blog, which presents European politics to readers in Britain and worldwide.

Gavin Hewitt's Europe is listed on multilingual Bloggingportal.eu, which has now grown to 532 great Euroblogs.

Bloggingportal.eu is your useful one-stop-shop for fact, opinion and gossip on EU affairs, i.a. politics, more than thirty policy areas, communication, economics, finance, business, civil society and law.

At the same time Euroblogs are an agreeable way to brush up one’s skills in foreign languages.

If you are interested in the EU or the euroblogosphere, you can also subscribe to the RSS feed for new blog posts appearing on Bloggingportal.eu.

By the way, I also discuss European issues, including the relations between the EU and Switzerland, in Finnish on Eurooppaoikeus and in Swedish on Grahnblawg.