Germany turns up the heat on tax evaders

* Officials go to France to buy Swiss bank data-magazine

* Finance Minister says Swiss bank secrecy must go

* Tax evader turns himself in, pays 4.5 million euros-Focus

By Erik Kirschbaum

BERLIN, Feb 6 (Reuters) - German officials hunting tax evaders are negotiating to buy Swiss bank account data from a whistleblower in France, a magazine reported on Saturday, after Berlin declared that banking secrecy was finished.

Munich-based Focus magazine said tax authorities would acquire this weekend data on 1,500 German clients of a Swiss bank, in an campaign which Switzerland's president said on Saturday risked encouraging a market for stolen goods.

Quoting sources close to the investigation, Focus said the unnamed whistleblower had demanded a secret meeting in a neighbouring country as he feared he would be arrested in Germany and the data confiscated as illegally-obtained material.

The four officials were from the tax office in Wuppertal in the state of North Rhine-Westphalia state which is leading the current evasion investigation. A spokeswoman for the finance ministry declined comment on the report in the newsweekly.

Despite protests from Switzerland, Germany has said it was prepared to pay 2.5 million euros for the stolen data said to be rich in detail about tax evaders that could, according to media reports, yield at least 400 million euros in tax revenues.

"NO FUTURE FOR BANK SECRECY"

German Finance Minister Wolfgang Schaeuble said Switzerland's bank secrecy law was out of date in the 21st century and had to be abolished.

"Bank secrecy cannot be an instrument in the 21st century used to evade taxes," he told the Sueddeutsche Zeitung newspaper in an interview published on Saturday. "There's no future for bank secrecy. It's finished. It's time has run out."

But Swiss President Doris Leuthard said Germany had to decide how it handled stolen goods. "We find the development simply difficult, worrying," she told Swiss national television (SF1) on Saturday. "If one buys, it makes it more attractive, it makes it a business and that creates more of a market."

Germany's willingness to pay for the stolen bank data has shaken Switzerland's large private banking industry and stirred emotions in both countries.

Germany already paid for stolen data in 2008 when it purchased information taken from Liechtenstein's top bank LGT, forcing the tiny principality to give up bank secrecy rules.

The Finance Ministry in Berlin plans to make any information obtained about tax evaders in other European Union countries available for free to those states, sources told Reuters.

Intense media coverage of the action against tax evaders has prompted a number of people to report previously undeclared earnings to the authorities.

A Berlin man turned himself in on Tuesday and paid the 4.5 million euros in back tax to avoid any looming prosecution, Focus reported. The Sueddeutsche Zeitung said seven tax dodgers in Lower Saxony had turned themselves in owing 1 million euros.

Schaeuble appealed to people who have evaded taxes in Germany to come clean before it is too late.

Tax officials in the southern states of Baden-Wuerttemberg and Bavaria have also now been offered data with sensitive information on thousands of possible tax evaders and they are examining samples, Der Spiegel reported on Saturday.

Officials in both states that are neighbours of Switzerland declined comment on the report. (Additional reporting by Jason Rhodes in Zurich) (Editing by David Stamp)