Berlin on Tuesday asked the Swiss ambassador to clarify the case of an alleged Swiss spy suspected of monitoring German finance investigators who pursue cross-border tax cheats.
The foreign ministry said the ambassador was asked, at the request of Foreign Minister Sigmar Gabriel, "to clarify the case of the Swiss citizen who has been arrested on suspicion of espionage."
German prosecutors said Friday that police had arrested a Swiss man identified only as Daniel M., 54, who was suspected of espionage activities since early 2012.
Federal police also raided several residential and business premises in and around the banking centre of Frankfurt, they said.
Die Welt daily reported that the man's alleged mission was to identify German tax investigators involved in the purchase of "tax cheat" CDs, which have upset German-Swiss relations in the past.
Several German states have since 2006 paid millions to unknown sources for the CDs, which have listed German citizens' account information with several Swiss and Liechtenstein banks.
Daniel M. was thought to have worked for the Swiss intelligence service NDB in the German finance and banking sector, the report said.
German tax investigators started a major crackdown in 2010 when they got their hands on data CDs with lists of bank account holders in foreign tax havens.
Many of Germany's rich, powerful and famous have as a result had to issue public apologies for stashing away their wealth abroad and paid back-taxes and fines.
The threat of dawn raids compelled thousands of other German tax cheats to come forward and report their accounts abroad, and pay back taxes on the interest earned plus fines.
The state of North Rhine-Westphalia alone has bought 11 CDs, which it says have led 120,000 German citizens to self-report Swiss bank accounts.
They have paid back billions of euros in taxes they owed, finance authorities have said.
The state's premier Hannelore Kraft said that, if the espionage case is true, it would be "a real scandal".