* NRW minister says Germany should go it alone on tax
* SPD seen pushing for tax crackdown in talks with Merkel
* Swiss tax deal not the answer to German funding gap
By Noah Barkin
BERLIN, Oct 11 A new German government should
crack down on tax avoidance by multinational firms without
waiting for its European partners to act, an influential member
of the Social Democrats said ahead of a new round of exploratory
coalition talks with Angela Merkel.
Norbert Walter-Borjans, finance minister for the big state
of North Rhine-Westphalia (NRW), told Reuters he expected the
fight against tax evasion and profit-shifting by companies to be
a major topic of discussion if the SPD enters more formal
negotiations with Merkel's conservatives.
Walter-Borjans has made a name for himself by backing the
purchase of data on secret Swiss bank accounts from
whistleblowers. He works for Hannelore Kraft, the powerful
regional premier of NRW who is expected to play an important
role for the SPD in any future coalition talks.
"Until we get a European solution, Germany can take steps at
the national level," Walter-Borjans said, arguing for new rules
to tackle the practice of firms placing intellectual property
with subsidiaries in tax havens, which then charge affiliates in
countries like Germany or Britain fat fees for its use.
The licensing charges reduce tax bills in major markets.
Revelations that companies like Apple, Google,
Amazon and Starbucks have reduced their tax
bills in this way have helped drive corporate tax avoidance to
the top of the international political agenda in the past year.
"We can place a limit on how much firms can deduct by paying
royalties for intellectual property," Walter-Borjans said.
"Or we can introduce a minimum taxation rate, independent of
whether profits are being shifted to affiliates in countries
like the Netherlands or elsewhere."
The leaders of the G20 group of nations have all backed an
effort by the Paris-based Organisation for Economic Cooperation
and Development (OECD) to tackle corporate tax avoidance.
But the comments by Walter-Borjans show that the SPD, if
they enter the government, will not be prepared to wait another
two years for the OECD to submit its recommendations for change.
His remarks also suggest the SPD will demand a tougher
stance against tax avoidance in talks with Merkel, whose
conservatives emerged as the dominant political force in an
election last month, but must find a coalition partner to rule.
A second round of exploratory discussions between Merkel and
the SPD is scheduled for Monday. More formal talks on forming a
right-left 'grand coalition' could start in late October.
Walter-Borjans said Merkel's conservatives had a "huge
interest" in cracking down on tax avoidance, in part because
they need to come up with new revenue streams to pay for
billions of euros in planned public investment in
infrastructure, education and research.
The SPD favours tax hikes on the wealthy to pay for these
investments, but Merkel's party has ruled those out, without
explaining how it will come up with the necessary funds.
In the interview, Walter-Borjans warned Merkel's party
against assuming it could plug the hole by reviving a bilateral
tax deal with Switzerland that was blocked last year by SPD
regional leaders, led by Kraft, because they said it was too lax
on tax dodgers.
"It's clear that we won't be able to resolve this with a
very small, one-off back-tax payment from Switzerland," he said.
Instead, Walter-Borjans said Germany should use its muscle
to pressure Switzerland into agreeing to the automatic exchange
of information on holders of Swiss bank accounts, similar to the
deal it has done with the United States.
"How quickly we can achieve this, I don't know. But if we
wait for others, it won't happen fast," he said.
(Additional reporting by Tom Bergin in London; editing by