Sunday, 14 October 2012

Germany, Singapore ink deal against tax evasion

File picture of the skyline of Singapore's financial district across the Singapore River (AFP/File, Simin Wang)
BERLIN — Germany and Singapore agreed Sunday to improve cooperation to clamp down on tax evasion, the German finance ministry said in a statement.

Both countries have agreed to incorporate the latest Organisation for Economic Cooperation and Development (OECD) standards on exchanging information in their double taxation accord, the statement said.

When the accord is ratified in both countries, authorities will share information about all forms of tax, not just income and capital taxes, the ministry said.

In addition, the information exchange will no longer depend on the taxpayer being resident in one of the two countries, and banking secrecy "will not constitute an obstacle to exchanging information," Berlin said.

Germany hopes to seal a similar deal with Switzerland to resolve a dispute over tax evasion and bank secrecy which has hurt relations between the neighbours.

A Swiss-German tax deal is due to take effect in January 2013 but still needs to be ratified by both parliaments.

The double taxation agreement, signed by ministers this year, would see German citizens with assets parked in Switzerland's notoriously secretive banks paying a tax rate of 26.4 per cent on these holdings.

The neighbours have been embroiled in a spat since 2010 when German authorities raided branches of Credit Suisse bank in 13 German cities after buying data on suspected tax frauds.

Switzerland reacted angrily, saying the data were stolen in violation of its banking secrecy laws.

As much as 180 billion euros ($233 billion) in German assets are deposited in Switzerland, according to unconfirmed media reports.

According to a report in Der Spiegel news weekly Sunday, tax authorities in the state of Rhineland-Palatinate are preparing to purchase another disc.

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