TAX NEWS - June 2010

German Tax: Germany Buys CD Containing Data on 20,000 Swiss Bank Accounts

German tax authorities bought a CD containing data on some 20,000 Swiss bank accounts from an unidentified seller, raising the stakes in their pursuit of tax evaders that has ruffled relations with neighboring Switzerland.

The federal German government shared the purchase price with the western state of Lower Saxony, whose tax authorities bought the CD, federal Finance Ministry spokesman Michael Offer told reporters today in Berlin. The CD had originally been offered to authorities in Baden-Wuerttemberg, yet the state's premier, Stefan Mappus, turned it down in February, saying it was legally risky.

The purchase of stolen bank data earlier this year, first by the state of North Rhine-Westphalia, sparked a conflict between the German and Swiss governments about methods used to obtain information on potential tax cheats. Switzerland has insisted it won't offer legal assistance in cases involving stolen data.

The purchase also caused controversy inside Chancellor Angela Merkel's coalition about the propriety of buying tax information from data thieves. After Mappus refused to buy the second CD, German Finance Minister Wolfgang Schaeuble's staff said they would find another state tax authority to get the information.

In the meantime, thousands of people across Germany filed voluntary tax declarations on their Swiss bank holdings, fearing they would be caught up in the dragnet. In March, authorities opened investigations into some 1,100 suspected cases of tax evasion, including employees of Credit Suisse Group AG.

Lower Saxony Finance Minister Hartmut Moellring anticipates obtaining tax revenue in the "double-digit millions" of euros from the CD, Deutsche Presse-Agentur reported. DPA cited the minister as saying the CD's purchase price was 185,000 euros ($222,167).