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Liechtenstein Welcomes Bundesrat's DTA Approval

by Ulrika Lomas, Tax-News.com, Brussels

27 November 2012


The Liechtenstein government has recently welcomed the adoption of the German-Liechtenstein bilateral double taxation agreement (DTA) by the Bundesrat, Germany’s upper house of parliament.

Due to enter into force on January 1, 2013, the agreement complies with the Organization for Economic Cooperation and Development’s (OECD) standard on transparency and information exchange in tax matters. The information exchange provision allows for the automatic exchange of tax information.

Dating from November 17, 2011, the DTA with Germany provides notably for the waiver of a withholding tax imposed on dividend payments with a minimum participation of 10% and a minimum participation period of one year. The DTA also accords a withholding tax right for gains from the personal rights of artists and sportsmen.

Prior to the DTA, Liechtenstein and Germany had already concluded a tax information exchange agreement (TIEA) back in September 2009. The TIEA, which is also in accordance with the OECD’s standard on cooperation and information exchange, entered into force in October 2010.

Welcoming the outcome of the Bundesrat vote, Liechtenstein’s Prime Minister Klaus Tschütscher emphasized that the “important” accord will serve to reduce tax barriers and to promote and to strengthen economic relations between the two countries, noting that the DTA with Germany represents an important investment in the Principality’s future.

Highlighting the fact that Liechtenstein and Germany have for decades enjoyed a relationship based on partnership and respect. Prime Minister Tschütscher underscored that over the course of the last three years important framework conditions have been established to enable both economic locations to work more intensively together.

Extending the DTA network in all trade regions of the world lies at the very heart of Liechtenstein’s agreement and location policy, Tschütscher added, stressing that cooperation with the German finance ministry is “excellent”, and noting that the agreement will serve to normalize partially strained relations and to create legal certainty, crucial for the Principality’s small economy.

The German Bundesrat also recently adopted DTAs with the Netherlands and with Luxembourg.

TAGS: tax | investment | offshore confidentiality | tax information exchange agreement (TIEA) | double tax agreement (DTA) | Organisation for Economic Co-operation and Development (OECD) | Liechtenstein | offshore | agreements | withholding tax | Germany

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