German UBS clients raided on suspicion of tax evasion

The Guardian, November 12, 2012

German tax investigators on Monday carried out searches of hundreds of clients of Swiss bank UBS on suspicion of tax evasion. The raids, carried out by around 50 tax investigators across the country, were ordered by the state prosecutor’s office in the city of Bochum.

“There is an investigation into several hundred domestic customers of the Swiss bank UBS on suspicion of tax evasion,” spokesman Norbert Salamon said.

Prosecutors based their investigation on data contained on a computer disk purchased by the authorities in the state of North Rhine-Westphalia, where Bochum is situated. The finance ministry in the state, which is ruled by the Social Democrats (SPD) and Greens, has purchased a total of six CDs since 2010 in order to track down tax evaders.

Back in 2007, the German foreign intelligence agency paid a thief €4.6m (£3.7m) for information on German tax evaders with accounts in Liechtenstein. The most high-profile tax dodger exposed was the chief executive of Deutsche Post, Klaus Zumwinkel.

State prosecutors in the city of Mannheim said last week they were investigating UBS employees on suspicion of helping clients to evade tax.

The bank has denied any wrongdoing. “UBS fully supports the concern for German clients to be tax compliant,” UBS spokesman Yves Kaufmann Lobato said in an emailed statement. “In 2009, UBS undertook a thorough scrutiny of its cross-border business and adapted the rules where necessary. UBS takes disciplinary action against any employee who commits infractions against these rules, up to dismissal.”

Members of the SPD have warned that the latest developments concerning UBS could further undermine the German government’s attempt to secure a tax deal with Switzerland.

The treaty, which was negotiated by the German finance minster, Wolfgang Schäuble, and is supposed to come into effect on 1 January, would see an amnesty for Germans with assets in Swiss banks in exchange for a retroactive taxation rate of between 21% and 41%.

The Bundestag has already approved the deal but it needs to also pass the upper house of parliament, the Bundesrat in which the federal states are represented and where Chancellor Merkel’s centre-right government no longer enjoys a majority.

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