German tax inspectors have recently raided the homes of Credit Suisse clients suspected of evading taxes, according to bank and German government officials, in a probe that covers around 5,000 clients.

German tax inspectors have recently raided the homes of Credit
Suisse clients suspected of evading taxes, according to bank and German
government officials, in an investigation that covers around 5,000 clients,
according to the Wall Street Journal.

The clients allegedly bought insurance policies at a
Bermuda-based subsidiary of the Swiss bank between 2005 and 2009, the report
said. These policies were sold to clients to earn tax-free interest on savings.

The WSJ reported
that a Credit Suisse spokesperson said in a statement the bank has told clients
who bought the policies to talk to their tax advisors. The spokesperson added
that Credit Suisse told its clients they were responsible for determining their
tax obligations when they bought the products, which were legal in Switzerland.

In November last year, Credit Suisse said it would hand over
to the US Internal Revenue Service the names of clients suspected of evading US
taxes – the bank did not give a specific figure, however.

The German investigation reopens an affair that Credit
Suisse tried to close last September, when the bank agreed to a €150 million
($183.7 million) settlement to halt German investigations against bank
employees, the WSJ said.

German and Swiss authorities have clashed over tax issues in
recent years; German officials have used public funds to pay for data stolen
from a Swiss bank, for example, raising questions about the extent to which
governments will flout traditional rules of due process in their determination
to obtain revenues.