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:
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.