UPDATE: Germany, Switzerland To Sign Amended Tax Deal Thursday

--Germany and Switzerland wrap up tax deal that sets higher tax rates
--Agreement must win support from German opposition
--Deal may generate billions of euro in extra tax revenues for Germany


DOW JONES NEWSWIRES

BERLIN (Dow Jones)--Germany and Switzerland are close to signing a new tax deal which allows wealthy Germans to retain their anonymity, while generating billions of euros in tax revenues for Berlin and ending a bruising dispute between the two neighboring countries over tax evasion and bank secrecy.

The deal comes after Berlin and Berne agreed last-minute amendments to a pact reached last summer in an effort to make it more appealing to German opposition leaders, who said they plan to veto it.

The two countries ended a long-running tax dispute in September, signing a draft deal to tax German citizens' investment income in Switzerland, but German Finance Minister Wolfgang Schaeuble will need the support of the federal states led by the Social Democrats, or SPD, and the Greens before the German parliament can vote on it.

Germany's finance ministry said Berlin and Bern agreed on higher tax rates than previously planned. Unreported savings of wealthy Germans will be taxed retroactively at 21% to 41%, up from 19% to 34%, while future capital gains will be taxed by 26.4%.

In addition, those Germans inheriting bank accounts in Switzerland can choose between reporting their new assets and paying the respective individual tax rate or paying a tax rate of over 50% and retaining anonymity.

Swiss Finance Minister Eveline Widmer-Schlumpf and Germany's ambassador will sign the amended agreement in Bern later Thursday. The deal will need to be ratified by lawmakers in both countries if it is to be implemented by 2013, and the SPD and Greens-led German states may still block the deal in the German upper house claiming it is too lenient on tax evaders.

Switzerland, which has developed a $2 trillion offshore financial sector over the years, is battling to preserve its bank secrecy laws in the face of mounting international pressure from countries seeking to repatriate taxes owed by citizens who have stashed funds in Swiss accounts.

Germans are estimated to have around CHF150 billion ($163.5 billion) deposited in secret Swiss accounts, and with the ongoing euro-region debt crisis straining public budgets, the country is keen to get the owed monies back.

The Swiss and U.K. governments recently signed a similar tax agreement which will be presented to the respective parliaments this year for implementation in 2013.

The agreement with Germany comes as tensions between the two countries are high due to a recent Swiss warrant for the arrest of three German tax investigators in connection with a case involving a compact disc that was stolen from Credit Suisse Group (CS) containing confidential data about Germans suspected of tax evasion.

The German government has expressed understanding for the Swiss warrants, which are a result of the neighboring states' different views over the same element of an offense. It has also called on opposition parties to back the deal because it would prevent similar conflicts resulting from different legal systems once the agreement becomes effective.