Swiss bank accounts are often used by tax evaders. The German State of North Rhine-Westphalia has bought a CD with information about wealthy Germans who are clients of the Zurich branch of Coutts the private banking arm of the Royal Bank of Scotland.
The state authorities bought the CD as part of a program to identify tax evaders. Apparently they are considering the purchase of two more.The reported price paid for the CD was about 3.5 million euros or 4.3 million U.S. The CD includes names and account details of about 1,000 rich Germans who are customers of the Coutts bank according to the online edition of Financial Times Deutschland.. The newspaper noted that these clients were likely attempting to avoid paying taxes in Germany. Investigators reportedly examined 10 per cent of the data before purchasing the CD.
A spokesperson for Coutts said:"We are aware of the continued media speculation regarding a potential breach of client data secrecy at Coutts,""Following thorough investigation, we have no evidence to suggest any such breach has taken place," The finance ministry for North Rhineland Westphalia would neither confirm or deny the purchase of the CD. In 2010 several German states were able to buy CDs that contained banking data from whistleblowers. As a result many thousands of Germans opted to declare their holdings to avoid possible jail sentences.
A tax treaty between Switzerland and Germany was planned to come into effect next year. This case no doubt will be a blow to these plans. There is already tension between Germany and Switzerland over Swiss secrecy laws.
The planned agreement negotiated last September would allow Germany to levy taxes on assets in Swiss bank accounts. The German parliament has yet to approve the law which would come into effect in 2013. The deal included a provision that Germany would no longer be allowed to buy CD's containing tax data. However there is a question whether the agreement will even be approved. The Finance Minister of North Rhine-Westphalia said:
."We cannot agree to the planned tax agreement with Switzerland as it stands and without the approval of states ruled by the Social Democrats and Greens, it cannot come into effect," No doubt tension between Switzerland and Germany on this issue will increase.