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Germany asks Swiss envoy to clarify suspected spy case

Berlin on Tuesday asked the Swiss ambassador to clarify the case of an alleged Swiss spy suspected of monitoring German finance investigators who pursue cross-border tax cheats.

Published: 3 May 2017 09:03 CEST

Germany asks Swiss envoy to clarify suspected spy case

The banking centre of Frankfurt. Photo: DPA

The foreign ministry said the ambassador was asked, at the request of Foreign Minister Sigmar Gabriel, “to clarify the case of the Swiss citizen who has been arrested on suspicion of espionage.”

German prosecutors said on Friday that police had arrested a Swiss man identified only as Daniel M., 54, who was suspected of espionage activities since early 2012.

Federal police also raided several residential and business premises in and around the banking centre of Frankfurt, they said.

Die Welt daily reported that the man's alleged mission was to identify German tax investigators involved in the purchase of “tax cheat” CDs, which have upset German-Swiss relations in the past.

Several German states have since 2006 paid millions to unknown sources for the CDs, which have listed German citizens' account information with several Swiss and Liechtenstein banks.

Daniel M. was thought to have worked for the Swiss intelligence service NDB in the German finance and banking sector, the report said.

German tax investigators started a major crackdown in 2010 when they got their hands on data CDs with lists of bank account holders in foreign tax havens.

Many of Germany's rich, powerful and famous have as a result had to issue public apologies for stashing away their wealth abroad and paid back-taxes and fines.

The threat of dawn raids compelled thousands of other German tax cheats to come forward and report their accounts abroad, and pay back taxes on the interest earned plus fines.

The state of North Rhine-Westphalia alone has bought 11 CDs, which it says have led 120,000 German citizens to self-report Swiss bank accounts.

They have paid back billions of euros in taxes they owed, finance authorities have said.

The state's premier Hannelore Kraft said that, if the espionage case is true, it would be “a real scandal”.

Why do companies in Switzerland have to pay church taxes?

Do companies need to pay Switzerland’s church tax?

Unfortunately, yes, companies are required to pay church tax most of the time and across most of Switzerland’s 26 cantons, as per Article Three of the Swiss Constitution.

There are very few exceptions.

If your company has an explicitly religious focus, it may be exempt from church tax.

Another exemption may apply if your company is a partnership. If the owner has left their church, as per the requirements for individuals, the company may no longer be liable.

Of course, this depends on cantonal tax laws, which can vary widely across Switzerland. That’s why it’s essential to understand your canton’s tax laws before setting up shop.

READ MORE: Do I have to pay ‘church tax’ in Switzerland?

How much is it?

Church tax is a proportion of cantonal taxes, representing approximately 23.5% of net profits. The exact distribution will vary from canton to canton – and year to year.

Are there cantons where companies are not liable for the church tax?

Some cantons don’t levy church tax on companies.

The good news is that companies based in Geneva, Basel-City, Aargau, Schaffhausen, and Appenzell-Ausserrhoden do not have to pay.

In two other cantons, Ticino and Neuchâtel, the payment of church tax is optional for companies.

Do sole traders and freelancers have to pay?

Not unless the owner, as an individual, has indicated membership in one of the recognised churches in their canton during the registration process—the Swiss Catholic Church, the Roman Catholic Church, the Evangelical Reformed Church, or the Jewish community.

If you’ve already done this, you can leave the church by following a simple procedure, depending on your canton of residence.

This involves sending a registered letter to your parish or synagogue expressing a desire to leave the church. You must send a registered letter stating the same to the cantonal tax office.

Of course, this procedure will vary, so you must determine the exact process for your canton, and remember that the Swiss are sticklers for detail.

Having done this, you will be considered as leaving the church on December 31st of that year, and not be liable for church taxes from that point onward.

READ MORE: OPINION: Why so many Swiss are quitting the church and taking their money with them

How do the Swiss feel about this?

Despite a dramatic drop in the number of Swiss declaring membership in a church over the last five years – some estimates put it at approximately 5 percent – most of Switzerland’s cantons have yet to abolish church taxes on companies, and those referenda that are called on the matter do not succeed.

One reason could be—and so the churches argue—that scrapping the church tax on companies would substantially burden the state and, therefore, the average Swiss taxpayer.

The number of hospitals, aged care facilities, daycares, and schools run by churches—the Catholic church in particular—is cited. Substantive infrastructure costs could be incurred if these facilities were either closed down or taken over by the state.

That’s not to say that abolishing the church tax on companies is not a subject of frequent debate. As recently as this week, a right-of-centre FDP party member, Carlos Reinhard, introduced a motion in Bern’s cantonal parliament to make it voluntary for companies to pay the church tax.

Such a move would place in doubt the local Catholic church’s ability to fund the equivalent of approximately 38 million euros in works. Understandably, the church in the canton has been strenuously campaigning in favour of maintaining the status quo.

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