CS sees withholding tax on Germans' accounts-paper

ZURICH, March 15 (Reuters) - The chief of Credit Suisse's (CSGN.VX) private bank is proposing a withholding tax on bank accounts held by Germans in Switzerland to help ease strained ties with Berlin, a newspaper reported on Monday.

Such a withholding tax could mean outflows in the short term but would not greatly harm his bank's fortunes, Walter Berchtold told Germany's Handelsblatt.

"Long-term I'm very optimistic, because our business doesn't rely on untaxed funds," he said.

The German government has taken an increasingly tough line on tax evasion since the financial crisis broke and said last month it would pay for a CD of stolen Swiss bank data believed to be rich in detail about undeclared holdings.

Swiss banks, which manage some $2 trillion in offshore funds, should not be asked to check their clients' tax compliance, Berchtold said.

"One could implement a simple withholding tax on money domiciled in Switzerland. While that may be perceived as unfair, it would on the other hand help the German state raise more money," he said.

Germans hold an estimated 200 billion euros ($275 billion) in undeclared funds in Switzerland. A German trade union estimated Berlin's measures could net an additional half billion euros. [ID:nLDE61P1FN] (Editing by David Holmes)