Germany and Switzerland reached a deal Wednesday to end their long-standing row over German citizens stashing assets in Swiss banks in order to avoid paying taxes at home.

Under the agreement, the Swiss government is set to pay Germany 1.91 billion euros ($2.6 billion). The money will act as a down payment on tax revenue Berlin claims it has lost as a result of the tax evasion.

German tax evaders, meanwhile, will be offered the chance to make anonymous lump sum payments at a rate of between 19 and 34 percent of the assets they stored in Switzerland. The voluntary payments from tax evaders would offset the 1.91 billion euros, which could then be refunded to Swiss banks.

Swiss Finance Minister Eveline Widmer-Schlumpf said the deal "creates legal certainty and will strengthen the competitiveness of Switzerland in the long run."

Information accessible

Swiss banks maintain strict secrecy laws

In the future, Berlin will be able to request information from the Swiss government on suspected tax cheaters. The Swiss Finance Ministry expects the number of requests to reach between 750 and 999 over the next two years.

In July 2010, Germany had to purchase such information for 2.5 million euros. Switzerland condemned the move, claiming the purchased information was stolen and therefore violated its banking secrecy laws.

The deal, likely to take effect in 2013, would end the dispute over the purchased bank data. In exchange, Germany has agreed to drop plans to prosecute bank employees who helped Germans evade taxes.

"Germany no longer sees any reason for the purchase of stolen bank client data," said the Swiss Finance Ministry. "Switzerland undertakes to waive criminal prosecution of persons on account of involvement in illegally acquiring bank data."

Author: Spencer Kimball (AFP, dpa)

Editor: Martin Kuebler