BERLIN/BERN: Switzerland and Germany are to toughen their tax crackdown on secret Swiss bank accounts in a move that could pour billions of extra euros into German state coffers, but which does not go far enough for the country's main opposition party.
Social Democrat (SPD) leader Sigmar Gabriel said his party would vote against the revised deal when it goes to the Bundesrat upper house of parliament, where Chancellor Angela Merkel's government needs opposition support to ensure passage.
"It will fail a second time because the SPD-led states will not go along with it," Gabriel said, shortly after the German finance ministry announced revisions to the deal meant to get the SPD on board.
Gabriel described the deal as "a voucher for Persil washing powder for Swiss banks, to wash them white after they helped tax evaders".
After years of tortuous negotiations, the German and Swiss governments want to ratify the deal that could net the former billions of euros and end a diplomatic spat. Switzerland has agreed a similar deal with Britain and is also in talks with Austria and Greece.
The Swiss and German governments re-opened negotiations after the SPD rejected an initial deal signed last September, saying it was too lenient on tax dodgers. On Thursday they announced tougher terms, which met some but not all of the SPD's demands.
"The talks have been fairly heated recently," Swiss Finance Minister Eveline Widmer-Schlumpf told a news conference in Bern.
"I think we have found a fair compromise and a good solution for both sides," she added.
The dispute over tax evasion has strained ties between the two countries, and Switzerland said at the weekend it had issued arrest warrants for three German civil servants, accusing them of industrial espionage for buying the bank details of German tax evaders.
Switzerland's bank secrecy code has helped it build a $2 trillion offshore financial sector, and a pact with Germany would protect this banking tradition in return for a punitive Swiss-levied tax on German-held accounts.
Under the revised terms, the German finance ministry said the countries had agreed to raise the retroactive levy on German funds stashed away in Swiss bank accounts to a rate between 21 and 41 percent, from a previously agreed range of 19 to 34 percent.
They also agreed a one-off tax of 50 percent for people who inherit Swiss bank accounts and do not want to declare them, the finance ministry said.
Under the revised deal, German officials will be allowed to put in up to 1,300 requests with their Swiss counterparts to investigate cases of fiscal evasion, compared with a previously agreed 999.
Germans will have to alert the Swiss authorities when they move their money out of Swiss bank accounts from Jan. 1 2013, versus a previously agreed May 31, in order to prevent an exodus into other offshore accounts.
The legislation will likely now be put to Merkel's cabinet in May but will only face a vote in the Bundesrat after the summer, once two regional elections which the SPD hopes to win are out of the way.
The government has been operating under the assumption that some SPD states could drop their opposition after those elections, particularly as big states such as North Rhine-Westphalia stand to gain much-needed tax revenues, in some cases more than a billion euros.
Germans hold an estimated 150 billion Swiss francs in Swiss accounts.
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