ZURICH (Reuters) - The German chairman of Swiss bank UBS UBSN.VX has denied it helped wealthy Germans to dodge taxes by advising them to move funds to Singapore and other money centers ahead of the opening of hidden Swiss accounts to taxation for German authorities.
The German government’s deal with Switzerland to open up its famously secret bank accounts to the taxman is the result of public outrage after the 2008 financial crash and months of negotiation that followed.
The opposition Social Democrats in Berlin are attempting to torpedo Chancellor Angela Merkel’s deal, however, saying it still goes too easy on tax evaders who have stored money in offshore accounts in Switzerland.
SDP leader Sigmar Gabriel on Sunday said there had been “organized crime in Swiss banks” helping Germans avoid taxation.
Axel Weber, a former head of Germany’s Bundesbank and UBS chairman since May, told German business paper Handelsblatt that the bank had a “zero tolerance” policy for bankers who aid wrongdoing, echoing comments private bank head Juerg Zeltner made in a Reuters interview on Tuesday.
“UBS doesn’t help any client avoid their tax responsibilities,” Weber said.
Last week, North-Rhine Westphalia said it had bought new bank data on alleged German tax evaders with hidden Swiss accounts, raising the temperature of discussions between the neighboring countries who have agreed, but not ratified, the tax deal meant to sweep these accounts clean.
Previous leaks of data to German authorities led to rivals Credit Suisse CSGN.VX and Julius Baer BAER.VX being targeted. Weber said German officials had not told UBS what data they hold and that as a result he could not rule out action against the bank.
Both Credit Suisse and Julius Baer settled German probes by paying fines.
Gabriel’s Social Democrat party is seeking to sink the tax pact, under which Switzerland would impose a retroactive withholding tax on capital in Swiss bank accounts held by Germans and would tax future interest income from those accounts. But the account holders would remain anonymous and face no further action.
North-Rhine Westphalia said the data it bought showed money may be flowing into structures set up with the express purpose of avoiding the withholding tax.
Gabriel’s comments as well as the region’s data purchase have cast doubt on whether the withholding tax will be finalized, although Chancellor Merkel backed it again on Monday despite the opposition.
Reporting by Katharina Bart; editing by Patrick Graham