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TAX

German FM rebukes Switzerland over tax scandal

German Foreign Minister Sigmar Gabriel on Saturday upbraided Switzerland for allegedly monitoring German finance inspectors who hunt cross-border tax cheats.

Published: 7 May 2017 16:28 CEST
German FM rebukes Switzerland over tax scandal
German Foreign Minister Sigmar Gabriel. File photo: Tobias Schwarz/AFP
In a further sign of Germany's anger over the affair, Gabriel said the episode was “incredible” but hoped it would not “wreck” the countries' good relationship.
 
On April 28th, German prosecutors said they had arrested a Swiss man, identified as Daniel M., 54, who was accused of carrying out espionage activities since 2012.
 
According to the German media, his alleged mission was to identify German tax investigators involved in purchasing stolen data on German residents who illegally stashed their money in Switzerland.
 
 
In an interview with Deutschlandfunk radio on Saturday, Gabriel said the episode was “incredible.”
 
He said he had discussed the affair with Swiss Foreign Minister Didier Burkhalter, who assured him that monitoring of German tax inspectors was not ongoing, as it had stopped in 2014.
 
Gabriel also reacted strongly to arrest warrants issued by Switzerland for German tax inspectors.
 
He described this move as “scandalous,” adding that Germany had not yet received the warrants and would not reply to them anyway.
 
Since January 2006, several Germany states have bought CDs or USB sticks containing stolen data on German tax cheats, which come from Switzerland or Liechtenstein.
 
As a result, many of Germany's rich, powerful and famous have had to issue public apologies and paid back-taxes and fines.
 
Switzerland, where secrecy has been a cornerstone of the banking industry, reacted with outrage to the theft.
 
Berlin on Tuesday asked the Swiss ambassador, Christine Schraner Burgener, to clarify the case.
 
Gabriel on Saturday said he hoped that light would be shed on the affair and that German-Swiss relations would not be hurt.
 
“We do not wish to wreck our relationship with Switzerland, which is excellent,” he said.
 
According to a report in Bild daily on Tuesday, the alleged Swiss spy was a former police officer and a double agent who at one stage had spied for Germany on Switzerland.
 
In a joint report, the Sueddeutsche Zeitung daily and public broadcasters NDR and WDR added the spy had run a paid informant inside the finance ministry of North Rhein-Westphalia, Germany's most populous state.
 
The information reportedly helped Swiss authorities file charges of breaching Swiss banking laws and economic espionage against three German tax investigators.
 
In May 2015, the EU and Switzerland signed an agreement on exchanging bank data from 2018 that will effectively end the Swiss tradition of bank secrecy for members of the bloc.
 
For members

MONEY

Is it easy for a foreign resident get a loan in Switzerland?

When it comes to borrowing money from a Swiss bank, nationality may play a role in some cases, but not in others. This is what you should know about this process.

Published: 3 June 2021 12:31 CEST
Updated: 26 February 2024 11:24 CET
Is it easy for a foreign resident get a loan in Switzerland?
Getting a losn in Switzerland is subject to many conditions. Photo by Claudio Schwarz/Unsplash

Like almost everything in Switzerland, consumer loans are regulated by legislation, in this case the Consumer Credit Act.

It defines a loan as between 550 and 80,000 francs, “offered by commercial providers of financial services”. Lower or higher amounts are not subject to the Consumer Credit Act.

As is the case in many other countries, Swiss banks have strict criteria about who they lend money to. After all, no financial institution wants to deal with people who are not creditworthy.

Whether or not a foreign national can borrow money from a bank depends on their permanent place of residence and permit status.

As a rule, Swiss lenders don’t give loans to non-residents. So if you reside abroad, there is practically no chance that a bank in Switzerland will lend you money.

However, some financial institutions make exceptions for cross-border workers. If you fall under this category, you can use this interactive tool, select “ Permit G” under “Residence Permit” and see what, if any, options, there are.

READ MORE: EXPLAINED: What cross-border workers should know about taxation in Switzerland

If you are a foreign national but have a permanent residence status (Permit C), your chances of getting a loan are practically the same as those of Swiss citizens — provided, of course, that you meet all the requirements set by lenders (see below).

What about other permit holders?

If you have a B Permit, you might be approved for a loan, depending on how long you have had this permit — obviously, the longer the better.

However, “you may be offered a higher interest rate or a limited loan amount. This is because of the statistically higher probability that you will return to your home country. Some lenders require the loan to be repaid by the time the B permit expires”, according to consumer comparison site comparis.ch 

Holders of other, temporary or conditional permits are not accepted.

What conditions — other than residence permit — should you fill to be considered for a loan?

You must be at least 18 years of age, though additional restrictions may apply to applicants under 25 — for instance, a higher interest rate or a limited loan amount. That’s because “lenders are generally more cautious with young applicants as their financial circumstances are usually less settled and the risk of default is deemed to be higher,” Comparis noted.

The same cautious approach applies to pensioners, especially those who have no regular income. The social security payments (AHV/AVS) do not count as income for the purpose of the loan.

There is also other eligibility criteria, based on employment status and salary. People with a regular income have a higher chance of obtaining a loan than those who are self-employed, temporarily employed, work on hourly basis or, logically, unemployed.

Other factors, including your existing debts, are also taken into account in the decision process.

Basically, lenders favour applicants with a stable income and good financial standing, in much the same way as supplemental health insurance carriers prefer young and healthy people.

Keep in mind that if your loan application is rejected, this will be recorded in the database of the  Central Office for Credit Information, making it more difficult, though not impossible, to get a loan in the future.

READ ALSO: Does having a good credit score matter in Switzerland?

The same rules do not apply to American citizens

That’s because Swiss and European banks are subjected to US demands to disclose the assets of Americans overseas in order to prevent tax evasion.

As adherence to these requirements is a major headache for the banks and in some cases also violates their country’s privacy laws, financial institutions prefer not to deal with Americans at all, even those who are permanent residents.

If you are a US citizen who also has Swiss nationality, you may have an easier time of it, but could still face hurdles in obtaining loans and other banking services.

There is no immediate relief in sight, although many organisations representing Americans abroad are lobbying in Washington to change the existing legislation.

READ ALSO: Why are Americans being turned away from Swiss banks?

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