German Finance Minister Wolfgang Schaeuble and his Swiss counterpart Hans-Rudolf Merz on Friday worked out the first draft of a new dual-tax agreement between their two countries, but agreed not to disclose details pending final approval by governments in Bern and Berlin.

According to the ministries, however, the outline closely follows along the lines suggested by the Organization for Economic Cooperation and Development (OECD). Each country should be entitled to inquiries in individual cases only if there's suspected tax evasion, but there will be no automatic exchange of tax data.

Germany hopes that such an agreement will help to prevent tax evasion while Switzerland aims to comply with OECD standards. Last year, Bern was on the brink of being blacklisted as a tax haven by the OECD for its failure to ease its banking secrecy.

Merz dismissed the idea that Switzerland was a tax haven but admitted there were "certain assets that are not registered." In return for cooperation on tax evasion, he said, Switzerland expected to get easier access for its banks to the German market.

Easing the tensions

Swiss banks have for long served as a place for Europeans to park the money they wanted to hide from their national tax authorities. And Swiss banking secrecy laws made it virtually impossible for foreign authorities to pursue suspected tax evaders, leading to a long-festering diplomatic irritant.

Germany's Schaeuble, however, was eager on Friday to downplay the strained relations over the issue. "It's a visit among friends," he said after the meeting, adding that Germany had great respect for Swiss constitutional history.

Yet Germany over the last years has been one of the harshest critics of Switzerland's strict banking secrecy laws. Berlin has on more than one occasion purchased account information stolen from Swiss banks to crack down on tax fraudsters - a move that has lead to serious fallouts between the two countries.

It's not clear how much money German taxpayers are currently hiding in Switzerland, but experts expect the amount to be worth several billion euros. The dual-tax agreement, however, will not apply to past cases, but only to ongoing and future investigations.

ai/dpa/Reuters
Editor: Toma Tasovac