Credit Suisse tax dodge probe

Five thousand German customers of the Swiss bank Credit Suisse are being investigated in connection with cross-border tax evasion, a representative of the bank said on Wednesday.

"We are aware that German tax authorities are looking into some of our clients," the source said, confirming allegations in an article published in the business daily Handelsblatt on Wednesday.

"We are talking about customers living in Germany but with Credit Suisse accounts in Switzerland...there is no investigation into the bank," he added.

Those customers are believed to have purchased Bermuda-based life insurance products, which were tax free in Switzerland. Credit Suisse said in a statement that all German investors were notified "very clearly and in writing that they needed to clarify their own tax situations when investing in the products."

Bad press for Swiss banking

The revelations are a blow to Switzerland, which has been at pains to do away with its image as a tax evasion haven and has been working closely with Germany to this end. The two nations clashed last year over accusations that Credit Suisse had helped German clients dodge taxes, prompting the bank to pay out almost $185 million (151 million euros) to the German tax authority.

The two countries are set to sign a tax deal, which is expected to come into force at the start of 2013, subject to its ratification by both countries' parliaments.

But the deal has not stopped Germany and Switzerland from coming to blows over taxation issues in recent months.

Between 130 and 180 billion euros of German assets are concealed in the Swiss banking apparatus, according to German media. And earlier in the year, Switzerland ordered the arrest of three German tax inspectors, who were accused of buying a stolen CD revealing Credit Suisse clients accused of tax dodging.

sej/slk (AFP, AP)