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Liechtenstein, Germany Conclude Talks

by Ulrika Lomas,, Brussels

03 October 2012

Liechtenstein’s Prime Minister Klaus Tschütscher recently held talks in Berlin with German Finance Minister Wolfgang Schäuble, with the discussions focussing on current tax and financial market issues as well as on fiscal sustainability.

Commenting on the “friendly” meeting with Schäuble, Tschütscher emphasized that both countries remain committed to the idea that it is not possible to resolve current challenges without sustainable state finances.

Talks also covered the issue of tax transparency, and Tschütscher emphasized that the Liechtenstein government must strive to find the best solutions for the country’s traditional financial centre, both now and in the future, to assuage international concerns in this respect.

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 have some similarities to 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.

The Liechtenstein prime minister also unveiled details of the first independent, international, fund-rating agency, the so-called “Carlo Foundation”, headquartered in Vaduz.

A joint project with Germany and a non-profit agency, the Carlo Foundation was founded by representatives from industry, from government and from organizations back in July 2012. The aim of the foundation is to independently rate the sustainability of financial products to increase transparency and to promote both a sustainable financial market and sustainable business models. The foundation also aims to protect consumers as well as to promote awareness and interest in sustainable investment opportunities among the general public.

Concluding his remarks, Tschütscher insisted that investors, government and society need clear criteria to be able to assess how sustainable financial products and companies actually are. Only by doing so will it be possible to press forward with the urgent and much-needed shift towards a sustainable economy and society, the minister ended.

TAGS: tax | investment | offshore confidentiality | law | banking | investment funds | Liechtenstein | offshore | agreements | Germany

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