Bid to catch German tax cheats fails

The deal would have allowed Germans with undeclared assets in Switzerland to escape punishment by making a one-time payment of between 21 per cent and 41 per cent of the value of their Swiss-held assets. German authorities were also to be given more powers to seek information on German nationals’ accounts in Switzerland.

However, ahead of the vote in the upper house – where Germany’s 16 states are represented and Chancellor Angela Merkel’s centre-right government lacks a majority – politicians from the Social Democrat and Green parties said the deal was not tough enough.

The Swiss Bankers Association criticised the vote, saying it “has missed a major opportunity to reach a fair, optimum and sustainable solution for all parties”.

Finance Ministry spokesman Martin Kotthaus said the agreement had been the product of lengthy and complicated negotiations but that the government would try to determine if changes could be made to satisfy all sides.

France, whose tax treaty with Switzerland dates to 1952, is also renegotiating an accord to catch tax evaders.