Liechtenstein Expresses Concern Over EU Savings Tax Agreement

by Ulrika Lomas, Tax-News.com, Brussels

30 January 2003

Speaking to reporters following last week's ECOFIN meeting, at which an agreement on the taxation of non-resident savings interest was hammered out, Liechtenstein's Head of Government, Otmar Hasler expressed some concern at the EU's chosen solution.

According to statements made after the meeting, territories such as Jersey, Guernsey, the Isle of Man, the Cayman Islands, the BVI, Andorra, Liechtenstein and Monaco are expected to fall into line with one of the two alternatives to be deployed under the Directive: information sharing or a withholding tax. Speaking at a media conference last week, Mr Hasler suggested that:

'The EU Commission demands more from us than we are willing to give.'

Announcing that he anticipated an increase in pressure on the Principality as a result of the EU agreement, Mr Hasler nevertheless welcomed the fact that low tax jurisdictions are being given the choice between information exchange and imposing a withholding tax at source.

Observers have suggested that if its concerns can be overcome, the jurisdiction is likely to plump for the withholding tax option.

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