The 'Futuro' Looks Bright For Liechtenstein, Says Hassler

by Ulrika Lomas, Tax-News.com, Brussels

25 September 2008

In a policy statement before parliament, Prime Minister Otmar Hasler unveiled the government’s key tax and policy reform measures as part of the ongoing ‘Futuro Strategy’ designed to improve the future of the Liechtenstein financial centre.

According to Hasler, the effects of the global economic crisis, combined with growing pressure to conform and co-operate with other States and international organisations on tax measures have taken their toll on the centre. Indeed, with the EU hoping to strengthen the snooping powers of the Savings Tax Directive, this pressure will undoubtedly only mount.

Dependent on recognition by the international community, the country’s goals are to improve foreign relations and carry out domestic reforms designed to strengthen the business location. However, it must also balance this against protecting the privacy of investors.

With its focus firmly on the protection of privacy, the Futuro Strategy is dedicated to a liberal economic order while offering attractive framework conditions and showing restraint in State interventions, therefore maintaining incentives for private investment. Within the framework, a number of initiatives are being implemented: reform of the foundation and tax law, the Liechtenstein Business Location project, the promotion of research and teaching and the expansion of the National Administration’s service-orientated approach with modern government.

Liechtenstein urgently needs to improve its reputation. Placed on the “black list” of the Financial Action Task Force (FATF) for a short period at the end of the 1990s, it continues to stay on the OECD “black list” for tax matters. Rather more recently, its reputation was tarnished by the German tax scandal that broke earlier this year and the negative global publicity generated after it was accused of aiding and abetting citizens of Germany, the US and the UK, among other nations, in evading taxes.

Despite past problems, Hasler emphasised that Liechtenstein was endeavouring to restore relations with onshore powers. Indeed key objectives are: to conclude negotiations with the US and the Anti-Fraud Agreement with the EU by the end of the year and to remove Liechtenstein from the list of non-cooperative states in the field of tax co-operation.

Negotiations with the United States on information exchange in tax matters are already close to completion. This will not lead to automatic information exchange, rather information will be exchanged upon specific request at the level of both mutual legal and administrative assistance. Information exchange will not be limited to offences covered by Liechtenstein’s definition of fraud. This also raises expectation of positive developments in relations with the US, an agreement on the longer-term Qualified Intermediary ‘QI’ status and the beginning of tax co-operation with the US.

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