The compromise would enable German authorities to obtain the names of a German resident who are choosing to relocate their money from Switzerland abroad to prior to entry into force of the tax deal to circumvent the agreement.
A law is due to pass the Switzerland parliament in the autumn of 2013 that will enter the parliament at the same time as the tax agreement. That means that the existing treaty would not have to be amended since both of them will be up in parliament at the same time.
The reporting obligation might be enough to gain support from Germany Social Democrats who have always been against the deal because it has to many loopholes according to them. The SPD has said that it will veto the accord in Bunderstrat, where the black-yellow coalition government no longer has the majority to make many changes.
Guido Westerwelle, Germany Foreign Minster, recently said that they have ended the controversial purchase of German federal states of Switzerland banking data discs, which contains the names of German residents who have suspected to have Swiss bank account that are not recorded, and urged red-green led states to ratify the tax agreements as soon as possible.
The accord that was adopted at the end of April by the German cabinet, which has already been modified because of Switzerland, hopes to ensure that the equal treatment of the wealth of German citizens, regardless if they are in Germany of Switzerland, to restore tax quite for the past by means of the lump sum tax.
Germany collation government and Angela Merkel, the Chancellor of Germany, may reconsider the tax accord with the confederation but it may be difficult, as this issue has been a long standing banking secret between the two countries.
How does this issue affect Chinese investors? If a Chinese investor is a German citizen who has Swizz bank accounts, they should now become worried because Germany government will soon have access to their accounts in Switzerland, which many people believe is a breech of privacy. As many Chinese investors are looking for different ways to investor their money aboard, rethinking Germany may not be a bad idea.
