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German Cabinet Adopts Swiss Tax Deal

Monday, April 30, 2012

The German cabinet has recently adopted the bill implementing the bilateral tax agreement with Switzerland.

Describing the bilateral tax treaty as a 'landmark' in Swiss-German relations, the German finance ministry said that the deal will ensure the equal treatment of the wealth of German citizens, whether located in Germany or in Switzerland, and will restore tax equity for the past by means of a lump sum taxationt.

Following significant concessions from Switzerland, the cornerstones of the agreement are now as follows:

  • Following entry into force of the treaty, the capital deposits of German taxpayers located in Switzerland will be taxed at the same rate as applied to capital investments in Germany;
  • In the future, German heirs will either agree to a 50% tax levied on inheritances, or to a full disclosure;
  • The taxation of wealth will in future be assured by means of an exchange of tax information, which goes beyond the international Organization for Economic Cooperation and Development (OECD) standards, to ensure that no new deposits of undeclared wealth are hidden in the Confederation;
  • As regards the past, German residents can opt either for a flat tax imposed on capital or to submit a self-declaration. Otherwise, cases will be pursued; and
  • If German taxpayers relocate wealth from the Confederation to a third country, Germany will be able to obtain information from Switzerland regarding the precise flow of money, following entry into force of the treaty.
  • According to the German finance ministry, the agreement will serve to generate tangible fiscal revenues for the federal government, federal states and communes, noting that the federal states will receive a significant portion of the revenues.

    A first instalment of CHF2bn (USD2.2bn) is due to be paid to the German state directly following entry into force of the accord.

    Defending the agreement as the best and most comprehensive means of resolving the situation, the ministry underscores that the purchase of tax data discs was not a viable solution in the long-term.

    The ministry warns that failure to implement the agreement would be the worst outcome for all parties involved, as millions of irretrievable tax assets would continue to be lost every year.

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    The Report

    Offshore Trusts Guide: Introduction

    The History of Offshore Trusts
    Development of Professional Competence in the Jurisdictions
    What Future for the Trust?
    The New Age of Transparency
    The Swiss Association of Trust Companies
    The Society of Trusts and Estates Practitioners

    Offshore Trusts Guide: Jurisdictions

    Bahamas

    Bahamas: Legal Framework and Formation Rules and Fees
    Bahamas: 2006 Private Trust Companies Legislation

    Barbados

    Barbados: Legal Framework and Formation Rules and Fees
    Barbados: Supervisory and Licensing Regime and Fees

    Bermuda

    Bermuda: Legal Framework and Formation Rules and Fees
    Bermuda: Supervisory and Licensing Regime and Fees

    British Virgin Islands

    British Virgin Islands: Legal Framework and Formation Rules and Fees
    British Virgin Islands: Special Trusts Act 2003
    British Virgin Islands: The Trustee Act 2003
    British Virgin Islands: :Supervisory and Licensing Regime and Fees
    British Virgin Islands: New Laws on Private Trust Companies
    British Virgin Islands: New Private Trust Company Regulations

    Cayman Islands

    Cayman Islands: Legal Framework and Formation Rules and Fees
    Cayman Islands: Supervisory and Licensing Regime and Fees

    Cook Islands

    Cook Islands: Legal Framework and Formation Rules and Fees
    Cook Islands: Supervisory and Licensing Regime and Fees

    Cyprus

    Cyprus: Legal Framework and Formation Rules and Fees
    Cyprus: Supervision, Licensing and Tax

    Gibraltar

    Gibraltar: Legal Framework and Formation Rules and Fees
    Gibraltar: Legislation, Regulation and Supervision

    Guernsey

    Guernsey: Legal Framework and Formation Rules and Fees
    Guernsey: Trusts Law 2007

    Isle of Man

    Isle of Man: Legal Framework and Formation Rules and Fees
    Isle of Man: Supervisory and Licensing Regime
    Isle of Man: Uses Clients and Tax Treatment

    Jersey

    Jersey: Legal Framework and Formation Rules and Fees
    Jersey: Supervisory and Licensing Regime
    Jersey: Trusts Amendment Act 2006
    Jersey: Foundations

    Liechtenstein

    Liechtenstein: Legal Framework and Formation Rules and Fees
    Liechtenstein: Regulation Supervision and Transparency
    Liechtenstein: Characteristics of Liechtenstein Trusts
    Liechtenstein: Foundations

    Madeira

    Madeira: Legal Framework and Formation Rules and Fees

    Malta

    Malta: Legal Framework and Formation Rules and Fees
    Malta: The Trust and Trustees Act 2004

    Mauritius

    Mauritius: Legal Framework and Formation Rules and Fees
    Mauritius: Characteristics of the 2001 Trusts Act
    Mauritius: Additional Provisions of the 2001 Trusts Act
    Mauritius: Tax Treatment

    Monaco

    Monaco: Legal Framework and Formation Rules and Fees

    Nevis

    Nevis: Legal Framework and Formation Rules and Fees

    Panama

    Panama: Legal Framework and Formation Rules and Fees
    Panama: Requirements for Acting as Trust Company in Panama

    Seychelles

    Seychelles: Legal Framework and Formation Rules and Fees

    Turks & Caicos

    Turks & Caicos: Legal Framework and Formation Rules and Fees
    Turks & Caicos: The Voidable Dispositions Ordinance

    Vanuatu

    Vanuatu Legal Framework and Formation Rules and Fees




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