Liechtenstein To Be 'Haven Of Stability'

by Ulrika Lomas, Tax-News.com, Brussels

31 December 2008

Looking back over 2008, and ahead to 2009, Liechtenstein's Prince Alois stressed the Principality's continuing commitment to banking secrecy, but suggested that the jurisdiction hopes to be a "haven of stability" over the coming year.

Speaking to the Liechtensteiner Vaterland, and at the traditional meeting of Heads of State of Switzerland, Germany, Austria, and Liechtenstein in Rapperswil in November, the Hereditary Prince revealed that although the current global financial crisis is affecting Liechtenstein: "While we will generate lower earnings next year, we will not have any complete collapses as are being observed nearly everywhere else."

Commenting on the planned reforms to the jurisdiction's tax regime, Prince Alois suggested that although the government was unlikely to need to draw on its financial reserves to cope with the economic crisis, he could see said reserves being utilized to assist the introduction of the new tax system, for example by compensating for the lower revenues likely to result, during the introductory period, from lower corporate tax rates.

With regard to the Tax Information Exchange Agreement (TIEA) with the United States, in his interview with the Liechtensteiner Vaterland, the Hereditary Prince urged a "balanced solution" taking into account the needs of both sides, and ensuring that agreement can be reached on extending the Qualified Intermediary (QI) status for the jurisdiction's banks.

"Since, globally speaking, a large number of stocks are traded in the US, the lack of a QI status would of course be a major disadvantage for our financial center," he told the newspaper.

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