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Backers and adversaries of the Rubik bilateral taxation agreement that Germany has signed with Switzerland maintained their irreconcilable positions, on 24 September in Berlin.
The Finance Committee of the Bundestag, the German parliament's lower chamber, held a public hearing on this sensitive issue as important parliamentary votes loom in November (see Europolitics 4492). A total of 23 experts in different areas (Swiss state secretary, bankers, university professors, tax consultants, tax administration officials, NGO representatives, etc) participated.
The Rubik agreement, which provides for the anonymous regularisation of assets stashed by residents of Germany in Switzerland, and the levy of a withholding tax at the source on income that continues to be earned on these assets in the future, is generally viewed positively by the banking community.
For the German Bankers' Association, it offers "the opportunity to achieve its objectives": to replenish the state budget without encountering much opposition. The German government expects to recover €1.62 billion in 2013. "Never has Germany had the opportunity to rely on aid from another state to enforce its tax claims," said tax lawyer Jochen Lüdicke (Freshfields Bruckhaus Deringer).
Reactions in academia are much more mixed. Professor Lorenz Jarass (Hochschule RheinMain Wiesbaden) commented that if the German parliament ratifies the agreement, it will be giving fraudsters "a blank cheque" because Rubik will preserve Swiss banking secrecy. According to Zurich-based international tax expert Mark Morris, this is all the more true because Rubik is like emmenthal cheese: full of holes. Trusts and foundations, among other entities, will remain very attractive vehicles for those who wish to evade taxes. Swiss State Secretary for International Financial Issues Michael Ambühl naturally disputed this claim, saying the agreement is "broad" in scope.
For Itai Grinberg, professor at Georgetown University in the United States and former adviser in the Obama administration, that is nevertheless not the most serious consideration. The adoption of automatic information exchange between administrations on the widest scale possible is the only way to fight tax evasion effectively, he argued.
If it endorses Rubik, Berlin may well "nip in the bud the emergence of a multilateral system" based on this principle, which it nevertheless advocates in other bodies (EU, OECD, agreement with the United States on FATCA). The question is how to convince Luxembourg, Austria, Singapore and Hong Kong to abolish banking secrecy if Switzerland is not obliged to do so. Predictably, this view was echoed by Markus Meinzer of Tax Justice Network.
Backers and adversaries of the Rubik bilateral taxation agreement that Germany has signed with Switzerland maintained their irreconcilable positions, on 24 September in Berlin.
The Finance Committee of the Bundestag, the German parliament's lower chamber, held a public hearing on this sensitive issue as important parliamentary votes loom in November (see Europolitics 4492). A total of 23 experts in different areas (Swiss state secretary, bankers, university professors, tax consultants, tax administration officials, NGO representatives, etc) participated.
The Rubik agreement, which provides for the anonymous regularisation of assets stashed by residents of Germany in Switzerland, and the levy of a withholding tax at the source on income that continues to be earned on these assets in the future, is generally viewed positively by the banking community.
For the German Bankers' Association, it offers "the opportunity to achieve its objectives": to replenish the state budget without encountering much opposition. The German government expects to recover €1.62 billion in 2013. "Never has Germany had the opportunity to rely on aid from another state to enforce its tax claims," said tax lawyer Jochen Lüdicke (Freshfields Bruckhaus Deringer).
Reactions in academia are much more mixed. Professor Lorenz Jarass (Hochschule RheinMain Wiesbaden) commented that if the German parliament ratifies the agreement, it will be giving fraudsters "a blank cheque" because Rubik will preserve Swiss banking secrecy. According to Zurich-based international tax expert Mark Morris, this is all the more true because Rubik is like emmenthal cheese: full of holes. Trusts and foundations, among other entities, will remain very attractive vehicles for those who wish to evade taxes. Swiss State Secretary for International Financial Issues Michael Ambühl naturally disputed this claim, saying the agreement is "broad" in scope.
For Itai Grinberg, professor at Georgetown University in the United States and former adviser in the Obama administration, that is nevertheless not the most serious consideration. The adoption of automatic information exchange between administrations on the widest scale possible is the only way to fight tax evasion effectively, he argued.
If it endorses Rubik, Berlin may well "nip in the bud the emergence of a multilateral system" based on this principle, which it nevertheless advocates in other bodies (EU, OECD, agreement with the United States on FATCA). The question is how to convince Luxembourg, Austria, Singapore and Hong Kong to abolish banking secrecy if Switzerland is not obliged to do so. Predictably, this view was echoed by Markus Meinzer of Tax Justice Network.
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