Switzerland’s tax treaty with Germany may finish banking secrecy in Europe and prompt withdrawals, as Swiss banks will no longer guarantee client confidentiality.
The treaty would allow investigators to request Swiss assistance in tracking down undeclared money deposited by German nationals, said Eric Jucker, a Zurich-based tax lawyer. It would probably be signed this month by Swiss Finance Minister Hans-Rudolf Merz and his German counterpart Wolfgang Schaeuble.
“The agreement, which will come into force, will further the information that can be exchanged between officials,” Jucker said. “Banking secrecy will come to an end outside Switzerland, as the country adopts international tax standards,” he added.
Germans are the biggest clients of Swiss money managers with assets worth 260 billion francs ($264 billion), according to estimates from Geneva-based broker Helvea. Swiss banks, including Julius Baer Group and Bank Sarasin & Cie, are now setting up branches around Europe to retain cross-border clients.
The German accord follows standards set out in Switzerland’s agreement with the Organization for Economic Cooperation and Development in March 2009 after the country was threatened with being blacklisted as a tax haven. It will spell out circumstances under which Switzerland will give Germany “administrative assistance”, in cases where there is evidence of tax evasion, said Mario Tuor, a spokesman for the Swiss State Secretariat for International Financial Matters in Bern.