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Liechtenstein, Austria Hail Tax Deal "A Success"

by Ulrika Lomas,, Brussels

20 January 2014

Liechtenstein's Prime Minister and Finance Minister Adrian Hasler has recently held talks in Vienna with Austria's Vice Chancellor and Finance Minister Michael Spindelegger, with the discussions focussing on the "success" of the bilateral withholding tax agreement concluded between the two countries last year.

During the course of the meeting, both Ministers conceded that implementation of the treaty, which entered into force on January 1, 2014, is proceeding as planned. They insisted, however, that a prediction regarding anticipated payments flowing from the deal is not possible at this early stage. Many persons affected are clearly electing to regularize their tax situation, rather than opting for a one-off anonymous withholding tax settlement, Prime Minister Hasler revealed.

Commenting, Austrian Vice Chancellor Spindelegger made clear that the treaty is "a good solution for both sides," ensuring that both capital and foundations assets are subject to the appropriate level of taxation. Without the agreement, learning about such assets would have been left to chance, while detailed information would only have been made available by Liechtenstein following a formal request, Spindelegger pointed out.

Concluding, Spindelegger emphasized that cooperation between the Principality of Liechtenstein and Austria is and will continue to be in the future both "friendly and constructive."

Echoing this view, Liechtenstein's Prime Minister Hasler confirmed that collaboration between the two countries "was and is very good, constructive, and solution-orientated."

The bilateral withholding tax agreement between Liechtenstein and Austria provides for specific withholding tax rates to be applied to regularize the untaxed assets of Austrians held in banks in Liechtenstein.

The accord subjects future capital gains realized by Austrian taxpayers in Liechtenstein to a 25 percent rate of tax. Furthermore, the provisions subject hitherto unreported assets to a one-off withholding tax payment, with rates varying between 15 and 30 percent, rising to 38 percent for large wealth. Foundations in Liechtenstein are also subject to taxation under the terms of the deal.

TAGS: compliance | Finance | tax | tax compliance | tax avoidance | Liechtenstein | tax rates | withholding tax | Austria | individual income tax | Tax | Tax Evasion

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