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Swiss bank settles German tax probe with 50 million euro payment

The private Swiss bank Julius Baer has agreed to pay 50 million euros to the German government, in response to an investigation into tax evasion in Germany.

The shadow of the German eagle over euro notes

German investigations into Julius Baer have been stopped

The Zurich-based Julius Baer Group announced on Thursday that it had agreed to pay German tax authorities a one-time fee of 50 million euros ($72.5 million) to halt further investigation into its clients' and employees' undeclared assets.

"This will end the investigations against Julius Baer," the bank said in a statement. "Following this settlement and, as a consequence, free from allegations, Julius Baer can now continue to fully concentrate on building and further expanding its business with German clients."

German authorities launched the investigation after acquiring a compact disc containing stolen financial data last year. The purchase triggered a wave of voluntary admissions by worried German citizens with Swiss bank accounts.

Berlin's efforts to stamp out tax evasion have also been leveled at Credit Suisse, with raids on its German offices and investigations into its clients and employees.

Not expecting more pay-offs

Baer said this payment should be the last chapter for the bank on the issue of tax evasion investigations.

"Germany is our largest market in Europe. We have a big onshore presence. We don't expect similar settlements in other countries," Julius Baer CEO Boris Collardi told Reuters.

The Swiss and German authorities are currently in negotiations to institute a new method to tax the estimated 150 billion euros worth of undeclared German assets in Swiss accounts.

In February Baer announced annual profits for 2010 of 504 million Swiss francs (386 million euros).

After the announcement Thursday, Julius Baer was trading down 0.33 percent on the SIX Swiss Exchange.

Author: Stuart Tiffen (Reuters, AFP)
Editor: Sam Edmonds

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