Germany's upper house vetoes Swiss tax-dodge deal

Opposition parties in Germany's upper house of parliament has rejected a tax deal with Switzerland which would help German tax evaders by taxing their undeclared assets held in Swiss bank accounts.

The controversial deal would have allowed wealthy Germans to avoid punishment by making a one-time payment of between 21 per cent and 41 per cent of the value of their assets, while their identities would not be revealed to German tax authorities.

The bilateral deal would have enabled Switzerland to retain its banking secrecy laws, while  acting as a tax collector for Germany, which would have depended on the Swiss authouirities to collect the right amount of taxes as well as detered Germany from forcing Switzerland to eliminate its offshore banking secrecy that has enabled tax evasion in other countries.

Germany claims that rich Germans have stashed away around €180-€200 billion (£145-160 billion) in Switzerland.

The bilateral tax treaty was passed by Chancellor Angela Merkel's centre-right coalition parties in the lower house of parliament, but in the upper house, Bundesrat, representing the country's 16 states, the Social Democrats and Green opposition parties vetoed the deal on the grounds that it rewarded tax dodgers and fooled honest taxpayers look.

The opposition argued that the deal also di not force Swiss banks to reveal the identities of Germans having secret Swiss bank accounts.