Biggest tax crime probe in Germany's history widens

Reply Fri 15 Feb, 2008 12:13 pm
The German Finance Ministry confirmed Friday that hundreds more heavy hitters are under suspicion. (The total sum of the evade taxes may be as much as €4 billion, nearly $6 billion.)

Corruption | 15.02.2008

Deutsche Post CEO Resigns Amid Tax Evasion Probe

The tax evasion scandal that has led to the fall of one of Germany's most prominent business people, Deutsche Post CEO Klaus Zumwinkel, could drag down hundreds of prominent Germans, a government spokesmen said.

As the police investigation continues and widens into allegations of tax fraud involving the Deutsche Post chief executive, Klaus Zumwinkel offered his resignation to the supervisory board of the company, German Finance Ministry spokesman Torsten Albig said on Friday, Feb. 15.

"The German government today accepted Mr. Zumwinkel's offer to resign," Chancellor Angela Merkel told reporters in Berlin. "I consider this to be in unavoidable step considering what has happened."

Zumwinkel, who is suspected of evading 1 million euros ($1.5 million) worth of taxes through a foundation in Liechtenstein, also stepped down from his position on the supervisory board of Deutsche Telekom, the government spokesmen indicated.

The German government, which owns 30 percent of Deutsche Post, "saluted this decision," Albig said, before adding that officials were probing "a very large number of cases" of tax fraud. He did not, however, identify who exactly was targeted by the probes.

Albig urged those involved to file corrected returns detailing their tax evasion - a device known as "self-reporting" under German law and aimed at allowing offenders to reduce possible penalties.

Full report

Different report by Spiegel-online
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Reply Fri 15 Feb, 2008 12:27 pm
why doesn't anyone ever help me in trying to avoid paying taxes ?
we even have to pay CANADIAN (!) income tax on our german pension income . the first few years it was tax-free - though it was counted as total canadian INCOME and resulted in reduced senior tax credits .
four years ago canada and germany revised their tax treaty and declared german pensions to be subject to canadian taxes !
someone took the case all the way to the canadian supreme court ... and lost ... the judges showed no mercy Evil or Very Mad
0 Replies
Walter Hinteler
Reply Thu 21 Feb, 2008 02:51 am
Merkel challenges Liechtenstein over tax evasion

Kate Connolly in Berlin

The Guardian, Thursday February 21 2008

The German chancellor, Angela Merkel, put pressure on the Liechtenstein government yesterday to increase the transparency of its banks and other financial institutions amid a nationwide inquiry into Germany's biggest tax evasion scandal.

Speaking after a meeting in Berlin with Otmar Hasler, the prime minister of the tiny alpine tax haven, Merkel said Liechtenstein had to "quickly clear up" a variety of problems, not least the ease and attractiveness its secret bank accounts offered to rich Germans looking for a tax oasis.

"It would not be good if Liechtenstein was found to be encouraging illegal activities," Merkel said, calling for Liechtenstein to cooperate with tax authorities in other countries.

Hasler responded by saying that Liechtenstein had done much to reorganise its banking system. "We are on the road to reform," he said, adding that his
government was ready to sign an anti-fraud policy with Germany.

Prosecutors are examining up to 1,000 Germans believed to have evaded taxes by transferring up to €4bn to secret accounts in Liechtenstein. The investigation has already led to the resignation of the chief of the German postal service, Klaus Zumwinkel.

The latest head to roll yesterday was that of Michael Betzl, the chief data protection officer of the southern state of Bavaria, who resigned from his post after tax inspectors raided his home and office. Much was made of the fact that his wife works for the BND, the foreign secret service, which unearthed the scandal after paying €4m to an alleged former employee of Liechtenstein's LGT bank for a CD-rom of client's data going back to the 1970s. The informer is believed to be living in Australia, possibly under BND protection.

The scandal sent shockwaves through the German business community and has now escalated into a heated political row between the two countries. Liechtenstein, a small principality of just 35,000 inhabitants has accused its 80-million strong neighbour of adopting bullying tactics.

Speaking in the capital, Vaduz, on Tuesday, Crown Prince Alois adopted strong, military-style language to express his frustration towards Germany, talking of an "unprovoked German attack" on a "miniature state". He added that rather than using taxpayers' money to pay for stolen data, "Germany would do better to use it to sort out its tax system" which he said was "even worse than Haiti's".

German politicians reacted angrily. The head of the SPD, Kurt Beck, accused Liechtenstein of using "robber baron" policies and suggested sanctions as a way to force it to clamp down on tax evaders. Those who want German tax law to be simplified - they are among the most complicated in the world and full of loopholes which have made tricking the taxman a national pastime - have expressed hope that the scandal might lead to reform.

"Money is not flowing into tax oases because they are so attractive, rather because the fiscal-political landscape in Germany is so utterly horrible," said Peter Ramsauer of the conservative Christian Social Union, who called for a simplified system with lower rates.
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Reply Sat 23 Feb, 2008 01:37 pm

Liechtenstein fury at German tax snoop
By Steven Rosenberg
BBC News, Vaduz

Walking around Liechtenstein for the first time, there are two things that strike me most about this place: manure and money.
The smell of manure - that comes from the farmland that surrounds this rural principality.

The money… well, you can see that from all the shiny banks and investment firms that jostle for space in the capital, Vaduz.

These are the companies that have made Liechtenstein one of the richest states in Europe.


Liechtenstein also has the reputation of being one of the most secretive tax havens in the world.

Just ask the Organisation for Economic Co-operation and Development.

This financial watchdog says Liechtenstein is one of only three states left on its blacklist of "uncooperative tax havens" (the others are not a million miles away - Monaco and Andorra).

Liechtenstein this week attacked the authorities in Berlin for buying information on German businessmen clients that have bank accounts in the tiny Alpine principality.

Germany has launched a tax evasion investigation using the data, which was supplied by an anonymous informant who was reportedly paid 5m euros (£3.75m; $7.3m).

Perhaps the tax evasion scandal explains the hushed silence that accompanies our arrival at our hotel.

To reach the lift we have to pass through the hotel restaurant.

As we walk in with all our equipment (TV camera, tripod and cases), the packed dining hall suddenly goes very quiet.

Feeling rather embarrassed, I scurry through as quickly as possible and go up to my room.

Admittedly, the people we meet in Liechtenstein are extremely friendly, even at LGT Group.

It was a former LGT employee who stole data relating to German businessmen in Liechtenstein.

It is thought this could be the same information that was bought up by the German secret service.

We are invited in for a background chat (but not allowed to switch on the camera, for fear of frightening clients).

'Completely unreasonable'

The Crown Prince of Liechtenstein is also welcoming.

I meet 39-year-old Prince Alois up in his 900-year-old castle, perched on a hill above Vaduz.

He may only have 34,247 subjects (that is how small Liechtenstein is), but the prince has more power than the Queen of England - for instance, he can sack his government whenever he chooses.

He may be powerful. But these days Prince Alois is not amused.

"I would describe the methods used by Germany as completely unreasonable," he tells me, referring to German spies buying up CDs containing confidential data.

I point out that his country stands accused of helping greedy German businessmen stash their money away, keep it hidden from the taxman and break the law.

"Well, we're not helping them," Prince Alois replies. "We just don't ask continuously questions like a nanny: 'Have you paid your taxes every year?' I think this can't be our role."

The Crown Prince believes that the problem is not Liechtenstein - it is Germany's own punitive tax system.

He tells me: "I think the only real long-term solution for Germany is to change their tax system to introduce an easy, simple-to-understand and just tax system.

"I think, then, people are happy to pay."

Prince Alois claims the principality has gone a long way to cleaning up its image as a financial centre.

Berlin, however, remains unconvinced.

As far as the German government is concerned, in Liechtenstein it is not only the manure that smells, but the financial world too.

Story from BBC NEWS:

Published: 2008/02/22 20:49:53 GMT

0 Replies
Walter Hinteler
Reply Sun 24 Feb, 2008 03:19 am
In today's The Observer

At least Germany stamps on tax havens

Nick Cohen The Observer, Sunday February 24 2008
Contact usClose Report errors or inaccuracies: [email protected] Letters for publication should be sent to: [email protected] If you need help using the site: [email protected] Call the main Guardian and Observer switchboard:
+44 (0)20 7278 2332
Advertising guide License/buy our content About this articleClose This article appeared in the Observer on Sunday February 24 2008 on p38 of the Comment section. It was last updated at 00:03 on February 24 2008. The wealthy have got away with financial crimes for so long they no longer regard them as crimes. When they are caught breaking the rules others must obey, they denounce the timid attempts by governments to enforce common standards as a shocking assault on a natural order in which tax is optional for those with the money to buy exemptions.

In Britain, we have seen the City in open revolt against the notion that foreign billionaires should pay a little more towards the costs of the country that protects them. Meanwhile in Germany, the decision by tax fraud investigators to... er... investigate tax fraud has turned the letters page of the Financial Times into a wailing wall for funny money men the world over.

Perhaps they are right to be alarmed. Maybe for the first time in a generation, governments are seeing the irresponsibility of the rich as a threat as dangerous to a nation's well-being as terrorism or drug trafficking and treating it accordingly. The German authorities are being admirably firm. In a sharp break from the indulgent treatment of the world's elite, Germany is paying informants, receiving stolen documents and conducting mass raids with all the vigour it would deploy against an Islamist terror cell.

The German Tax Union thinks Germany loses about €30bn (£22.5bn) a year in unpaid taxes. Much disappears into the statelet of Liechtenstein, which travel writers portray as Ruritanian idyll. True, there are charming gothic castles and it is governed by the superficially quaint Prince Hans-Adam II or, to give him his full title, His Serene Highness Johannes Adam Ferdinand Alois Josef Maria Marko d'Aviano Pius von und zu Liechtenstein, Sovereign Prince of Liechtenstein, Count of Rietberg and Duke of Troppau and Jägerndorf.
As soon as the Liechtenstein scandal broke, American Democratic senator Carl Levin announced an investigation into American plutocrats hiding money in his supreme highness's bank.

Last year Levin introduced the Stop Tax Haven Abuse Act to Congress, which included necessarily draconian measures to stop the rich robbing the rest of society. 'We cannot tolerate tax cheats offloading their unpaid taxes on to the backs of honest tax payers,' he declared.

As with Britain, it is easy to think that his stirring words were so much wind and that nothing will change in an America in which the rich have enjoyed a second gilded age under the Bushes and Clintons.

Still, it is worth noting that a then relatively obscure senator from Illinois co-sponsored Levin's Stop Tax Haven Abuse Act and said that 'we need to crack down on individuals and businesses that abuse our laws, so that those who work hard and play by the rules aren't disadvantaged'. His name was Barack Obama.
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Reply Sun 24 Feb, 2008 10:40 am
from walter's post ;

Last year Levin introduced the Stop Tax Haven Abuse Act to Congress, which included necessarily draconian measures to stop the rich robbing the rest of society. 'We cannot tolerate tax cheats offloading their unpaid taxes on to the backs of honest tax payers,' he declared.

"... 'We cannot tolerate tax cheats offloading their unpaid taxes on to the backs of honest tax payers..."

is there a law against it ? Shocked
does that mean i'll have to start paying taxes ? no fair , i say .
0 Replies
Walter Hinteler
Reply Sun 24 Feb, 2008 12:05 pm
hamburger wrote:
is there a law against it ? Shocked
does that mean i'll have to start paying taxes ? no fair , i say .

That's regulated by the "General Fiscal Law" (Abgabenordnung), the "General Fiscal Law implementing rules" (Anwendungserlass zur Abgabenordnung), the "Code of Criminal Procedure" (Strafprozeßorcnung) ... ...

Some infos about the various German relevant tax laws (and how they are prosecuted) here (in German)
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Reply Sun 24 Feb, 2008 02:04 pm
i'm just in the process of preparing our tax returns for 2007 . every year there are more forms to be filled in Mad
i tried tax software once but when it came to our german pension , it decided to quit !
and i'm not ready yet to pay a taxpreparer for doing the returns : I'M TOO CHEAP :wink:
so i'll be occupying the dining room table for a while .
0 Replies
Reply Sun 24 Feb, 2008 02:44 pm
UK in Liechtenstein tax data deal

The UK's tax authority has confirmed that it has paid an informant for data regarding British citizens who have accounts in tax haven Liechtenstein.
HM Revenue and Customs (HMRC) confirmed the move after a Sunday Times report, but would not say how much it had paid the informant.

HMRC said it was seeking "to protect the UK exchequer from those who seek to hide behind secrecy laws".

Separately Germany is involved in its own probe over Liechtenstein accounts.

The Sunday Times newspaper claimed the amount paid to the informant was £100,000 - but that figure was not confirmed.

HMRC said it had made the move in a bid to protect the UK against those trying to "deprive the UK of tax revenues to which it is entitled".

Meanwhile, Germany has launched a probe into tax evasion using data also from an anonymous informant, who was reportedly paid 5m euros (£3.7m; $7.4m).

In response, the country's head - Prince Alois von und zu Liechtenstein - has argued that Germany's move is illegal.

Liechtenstein is now conducting its own investigation on the subject.

The Organisation for Economic Cooperation and Development lists Liechtenstein as one of only three states remaining on its blacklist of "uncooperative tax havens".

Story from BBC NEWS:

Published: 2008/02/24 18:13:08 GMT


source :

btw i read in a recent issue of time magazine that SWITZERLAND is still the biggest taxhaven in the world .
switzerland is now imposing a 15 % withholding tax and is planning to increase it to 30% , i understand .
not to worry , counties such as DUBAI are apparently in the process of developing legislation to allow foreigners to shelter their income there . Laughing
it seems that paying taxes is really the privilege of the ORDINARY people -
at least that is one privilege we can count on for some time to come !
0 Replies
Reply Tue 26 Feb, 2008 11:49 am
even canada's GLOBE AND MAIL is taking an interest .


for the last month we've ben watching KARLHEINZ SCHREIBER spilling the beans before a comittee of the house of commons .
he's throwing around figures of $5 to 20 millions as if it's chump change .
the legislators are sitting there goggle eyed and have a hard time believing what's going on in business . they think that "commissions" :wink: of several hundred thousand $ are outrageous .
those legislators are babes in the woods .
0 Replies
Walter Hinteler
Reply Wed 27 Feb, 2008 04:20 am
From The Wrap, one of Guardian Unlimited's paid-for services

The tiny central European principality of Liechtenstein leads the Herald Tribune today.

Last week, HM Revenue and Customs admitted bribing an informant to pass on details of Britons' finances in an effort to identify tax evaders. Germany had previously done the same, paying 4.2m euros for the information. Now eight other countries are delving into their citizens' dealings in Liechtenstein.

"Ninety-one of the roughly 150 people so far being investigated in Germany have confessed to evading taxes," the paper reports. "A further 72 people have turned themselves in without a visit from the authorities."

The Times travels to Liechtenstein to sniff the mood. "If you listen to people at home, in the office, in the pubs, it is clear that Liechtenstein is bubbling with rage, boiling over," Guenther Fritz, the editor of the Liechtensteiner Vaterland, tells the paper. "We can't be treated like this."

Why the indignation? "Liechtenstein, perched on a barren mountainside between Austria and Switzerland, used to be dirt poor, living off the vineyards that still tumble down through the middle of the capital. Big, colourful postage stamps were also part of its financial strategy," explains the Times.

"That was about it until the father of the current ruler, Prince Hans-Adam, started to invite banks on to his mountain and construct a small, rocky, tax-free paradise. Drain away the customers from these banks, and Liechtenstein becomes a failed state."

IHT: German tax evasion case nets €28 million and 150 people

Times: Spies, whistle-blowers and threats: tax haven is called to account
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