German government is to buy Swiss tax data CD after all

Mar 3, 2010, 16:22 GMT

Berlin - The German government has decided to buy a CD containing confidential account information on German tax evaders investing money in Switzerland, a government spokesperson said on Wednesday.

The decision, announced by the finance ministry, followed protracted discussions with the state of Baden-Wuerttemberg, which had initially been offered the illegally obtained data.

A further case of stolen tax data also emerged in the state of Hesse, where the government said the decision on how to proceed rested with the state authorities. Hesse was investigating the data, Berlin officials said.

In recent weeks, the state of North Rhine-Westphalia bought a different CD, which contains enough data for the federal government to recoup far more in unpaid taxes than the 1.25 million euros (1.7 million dollars) it contributed towards the purchase.

The decision to buy stolen data has angered the Swiss authorities, who are in the process of negotiating a new double taxation agreement with their northern neighbours.

The German state of Baden-Wuerttemberg, which sits on the Swiss border, called off plans at the weekend to buy the Swiss data, citing concerns that the purchase might be illegal. Berlin had originally said that it would not directly buy the CD either.

In an apparent turnaround, the Berlin finance ministry said on Wednesday it would buy the CD after all - as long as there was interest from any of Germany's 16 states.

The finance ministry spokesman reiterated that tax investigations were purely a state matter.

The federal government said a 'multitude of data' was up for sale, adding during a parliamentary committee meeting that this information should be bought if it could indeed help track down tax evaders.

The mere existence of such data CDs has already prompted several hundred tax evaders to turn themselves in to the authorities.

Swiss officials have asked for German help to track down those people illegally obtaining the data. A justice ministry spokesman said no decision had been reached.