The Swiss and German governments are to sign an agreement early in August that ends a long-running dispute over alleged tax evasion by Germans who hold Swiss bank accounts, according to the Sonntagszeitung newspaper.

The counties will sign a deal on 10 August which enables income from dividends and interest on funds deposited in Swiss accounts to be taxed, the publication said.

Although the exact tax rate has still to be finalised it is likely to amount to around 25-26 per cent, the report added.

Certain German news reports said that Swiss banks could have to pay €10 billion to the German tax authorities to compensate for tax evasion over the last decade. However, the actual sum would be far less: around SFr2.0 billion (around $2.5 billion) under the agreement, the publication said.

The Swiss and German governments have been negotiating a dual taxation agreement for several years.

The issue of German citizens stashing money in Swiss accounts has been a sensitive issue between the countries for many years. In contrast to the approach of many nations, tax evasion is not a crime in Switzerland and the country’s centuries-old bank secrecy laws have come under fire. The German public authorities have reportedly paid for data stolen from banks located in Switzerland.