TAX NEWS - June 2010

German Tax: German tax crackdown may yield 1.5 bln eur

Roughly 1.5 billion euros in lost revenues could be recovered in Germany from 20,000 tax evaders who have so far come clean about their Swiss bank accounts, the DSTG financial authorities trade union said.

This week the German government said it and the state of Lower Saxony had bought a second CD of stolen Swiss bank data believed to be rich in detail about undisclosed holdings.

According to a survey of state finance ministries conducted by Reuters this week, more than 20,000 Germans have reported themselves to authorities since the start of February.

"From 20,000 I assume we'll get around 70,000 to 75,000 euros on average, which would make for roughly 1.5 billion euros in additional tax revenues," DSTG head Dieter Ondracek told Reuters. "That will be noticeable in the coffers."

The money would be booked this year, he added, noting that Germany's decision to purchase the Swiss data had been vindicated.

"It definitely paid off, because the publicity it generated made people take a different view of the risk of being caught."

Chancellor Angela Merkel's government has taken a tough line on tax evasion since the financial crisis broke, leading to a series of angry exchanges with neighbours like Switzerland and Liechtenstein over banking secrecy.

The move has yielded results, with Switzerland in February saying it would no longer accept untaxed money into its banks.

The wealthy southwestern state of Baden-Wuerttemberg, which borders Switzerland, has seen the biggest number of reported cases of tax dodging, with some 5,700 people turning themselves in since the start of February, the state government said.

Bavaria has logged more than 3,200 cases, Hesse some 2,700 and Germany's most populous state, North Rhine-Westphalia, over 4,100.

Germany's six eastern federal states have registered far less evidence of tax dodging. Excluding Berlin, only around 200 people have so far reported themselves in the formerly communist part of the country.