UPDATE 1-Germany, Swiss close to double taxation deal -paper

* Finance ministers to meet in coming days-Swiss Fin Min

* Deal to regulate exchange of data on tax evaders

(Adds comment from Swiss Finance Ministry, background)

BERLIN, March 24 (Reuters) - Germany and Switzerland are set to strike a deal on Friday that will clarify tax disclosure rules for Switzerland's multi-trillion-dollar wealth management industry, a German newspaper reported.

Switzerland has watered down its treasured bank secrecy law recently, caving into pressure from the United States and European governments which are cracking down on tax evasion.

Germany, along with Italy, the United States and France, has been one of the most fervent critics of Switzerland's banking secrecy and has paid for stolen data from Swiss banks to catch tax cheats.

Germany's willingness to buy stolen bank data increased pressure on Switzerland's large private banking industry and stirred emotions in both countries. Germans hold an estimated 200 billion euros in undeclared funds in Switzerland.

Officials from the German and Swiss finance ministries held negotiations last week over the double taxation agreement, which would regulate the exchange of information between the two countries on tax evaders, the Handelsblatt business daily reported.

"The negotiations are almost finished," the Handelsblatt quoted a German Finance Ministry spokesman as saying.

A German Finance Ministry spokesman declined to confirm the report but said constructive discussions had taken place. "We are holding talks about a working visit," he said.

Switzerland's Finance Ministry said it could not confirm the Handelsblatt report, but said that Swiss Finance Minister Hans-Rudolf Merz and German Finance Minister Wolfgang Schaeuble would meet in the coming days.

CREDIT SUISSE PROBE

Earlier this month, Credit Suisse (CSGN.VX) restricted its bankers' travel to Germany after German authorities said they had opened 1,100 tax evasion probes against the bank's clients and were investigating staff on suspicion of aiding evasion. [ID:nLDE62K089]

The probe is related to a CD with client data offered to the German state of North Rhine-Westphalia.

The Swiss government is currently trying to rescue a deal brokered between UBS (UBSN.VX) and the United States to hand over client data to end a legal case that has damaged the banking giant's reputation, prompting clients to pull billions of Swiss francs from accounts.

Switzerland has already signed a number of tax deals with various countries, including the United States and France, as part of its efforts to comply with international tax standards.

Double taxation treaties are agreements between two states dealing with cross-boarder tax issues, mainly to ensure individuals and companies do not get taxed twice. (Reporting by Paul Carrel; Additional reporting by Paul Arnold in Zurich; Writing by Katie Reid; Editing by Susan Fenton)