ZURICH, September 24 (Reuters) – A possible left turn in Sunday’s German election is scaring millionaires who want to move assets to Switzerland, bankers and tax lawyers say.
If the center-left Social Democrats (SPD), the far left Linke and the green environmentalists come to power, the reintroduction of a wealth tax and a tightening of inheritance taxes could be on the agenda. Politics. Read more
“For the super-rich, this is hot,” said a tax lawyer based in Germany with large operations in Switzerland. “The families of entrepreneurs are very alarmed.”
The move shows how many wealthy people still see Switzerland as an attractive place to store wealth, despite its efforts to demolish its image as a billionaire haven.
No country has more offshore assets than Switzerland and inflows accelerated in 2020, to the benefit of big banks like UBS (UBSG.S), Credit Suisse (CSGN.S) and Julius Baer (BAER.S) . Geopolitical tensions and fears of the economic fallout from the COVID-19 pandemic have made Switzerland’s political stability attractive.
Data from the Bank for International Settlements shows German household and business deposits in banks in Switzerland soared by nearly $ 5 billion to $ 37.5 billion in the first quarter of 2021, and that doesn’t include not stocks, bonds or financial products.
More recent figures are not available, but insiders say the influxes have continued. “I have booked an above average new amount of money as in the past three months,” said a senior client advisor at a large Swiss bank who deals primarily with Germans.
“Many wealthy people, especially entrepreneurs, fear that there is a left turn in Germany – whatever the outcome of the election,” said Florian Dürselen, head of Europe at wealth manager LGT Switzerland.
A leading Swiss banker said: “I know a number of German entrepreneurs who want to set up outside of Germany if things get too red (lefties) there.”
TAX ON ASSETS
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The SPD wants to reintroduce a wealth tax and increase inheritance taxes, while the Greens – a potential coalition partner – plan to tax wealth more heavily. Although both plan to raise income tax for high earners, an asset tax would raise much more money, the tax lawyer said.
He was seeing an increased demand for advice from clients, he said, noting that some entrepreneurs had sought to protect themselves by making new investments through a company in Switzerland or by transferring assets to a foundation in Liechtenstein.
However, simply transferring money to a Swiss bank account is no longer of any use. Under immense international pressure, the Swiss now share this account data with the tax authorities in the countries of origin of customers.
“Switzerland as a financial center is characterized by stability, legal certainty and a high level of financial competence. However, it offers no protection against tax evasion,” said a spokesperson for the Secretariat of Status of International Financial Matters (SIF).
LGT’s Dürselen said he recently spoke to a German entrepreneur who feared that Germany could soon tax foreign assets or transactions harshly, which furthered the perception of Switzerland as a safe haven for capital. .
“Personally, I suspect that considerable assets will continue to be moved to Switzerland,” he said.
A local politician said dozens of wealthy German entrepreneurs have inquired in recent months about their residence in one of the low-tax suburbs along Lake Zurich.
Reporting by Oliver Hirt; Written by Michael Shields; Editing by Alex Richardson
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