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EU, Liechtenstein Commit To Enhanced Savings Tax Deal

by Ulrika Lomas,, Brussels

29 October 2015

The European Union (EU) and Liechtenstein have reached an agreement that will see them automatically exchange information on their residents' financial accounts from 2017.

The agreement was signed on October 28. It upgrades a 2004 agreement under which Liechtenstein is required to apply measures equivalent to those in the EU's directive on the taxation of savings income in the form of interest payments. It will enter into force on January 1, 2016, and the first information exchanges will take place in 2017.

Under the new agreement, the parties will receive the names, addresses, tax identification numbers, and dates of birth of their residents with accounts in the other state, along with other financial and account balance information.

The European Council said that tax administrations in the EU and Liechtenstein will be able to identify taxpayers more effectively, administer and enforce their tax laws in cross-border situations, and avoid unnecessary further investigations.

The agreement contains provisions intended to limit the opportunities for taxpayers to avoid being reported to the tax authorities by shifting assets or investing in products that are outside the scope of the agreement.

EU member states have also committed "to analyze the situation of Liechtenstein in the light of the measures provided for in this agreement and to take account of this agreement in their bilateral relations with Liechtenstein."

Pierre Gramegna, the President of the European Council, signed the agreement on behalf of the EU. He said: "I am glad that this agreement could be reached between the European Union and Liechtenstein, as it constitutes an important step towards a level playing field and greater tax transparency in Europe and beyond."

Tax Commissioner Pierre Moscovici added: "Today the EU and Liechtenstein are sending out a clear message: we are partners in the international campaign for greater tax transparency. We are pulling in the same direction to create more openness and cooperation between tax authorities and to thwart those who seek to evade paying their fair share of tax."

Liechtenstein Prime Minister Adrian Hasler said: "The agreement signed today marks an important milestone in the implementation of the Government's financial center and tax strategy. Liechtenstein herewith fulfils its political commitment as a so-called early-adopter to start exchanging tax information automatically with appropriate states as from 2017."

TAGS: compliance | tax | tax compliance | tax avoidance | interest | law | banking | financial services | Liechtenstein | tax authority | tax planning | European Union (EU) | services | Europe | Tax | Tax Evasion

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