CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. Liechtenstein Eyes Tax Data Exchange With Germany

Liechtenstein Eyes Tax Data Exchange With Germany

by Ulrika Lomas, Tax-News.com, Brussels

11 September 2012


Determined to shake aside its image as a tax haven, Liechtenstein is currently considering the idea of concluding a withholding tax agreement with Germany, providing for an automatic exchange of tax information.

The tax deal sought by the Liechtenstein government would be based on the withholding tax agreement concluded recently between Germany and Switzerland and would serve to resolve the longstanding dispute between the two countries over undeclared and untaxed ‘black money’ held by German residents in Liechtenstein banks.

In contrast to the Swiss accord, which provides for a withholding tax to be levied by the Confederation’s banks and for the product of the tax to be subsequently transferred to the German tax authorities, while at the same time maintaining client anonymity and therefore traditional Swiss banking secrecy, Liechtenstein favours a deal providing for an automatic exchange of information. This would both reduce costs and liability issues.

Commenting on the plans, Liechtenstein’s Prime Minister Klaus Tschütscher announced recently that the government is currently conducting ongoing analysis, involving the evaluation of upcoming regulations, the examination of costs as well as liability issues for the individual institutes concerned and their employees.

Arguing in favour of an automatic exchange of information, Tschütscher explained that the introduction of a withholding tax requires many staff who need the necessary qualifications in order to know which tax is due in which country. In addition, protecting client anonymity is not very advantageous for banks if anything goes wrong, Tschütcher stressed. It may then be more efficient and more attractive to exchange data automatically, as the state concerned then incurs all of the expense and liability, the minister ended.

The bilateral tax agreement between Switzerland and Germany has yet to be ratified by the German parliament. The treaty’s future very much hangs in the balance given the continuing staunch resistance from the opposition parties.

Failure to adopt the text in the Bundesrat, or upper house, where Germany’s black-yellow coalition government no longer has a majority, would force Liechtenstein to seek an alternative solution.

TAGS: compliance | tax | offshore confidentiality | tax compliance | banking | employees | Liechtenstein | offshore | agreements | offshore banking | banking secrecy | withholding tax | Germany

To see today's news, click here.

 















Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »



Stay Updated

Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.


To manage your mailing list preferences, please click here »