Tax Evasion

Liechtenstein plans more tax cooperation

Liechtenstein plans to take more steps to facilitate cooperation with other countries on tax evasion, Crown Prince Alois said.

“The time has come to put our system of legal and administrative tax assistance on a new path,” Alois said in a speech in Liechtenstein today, according to a copy received by e- mail. The principality plans to offer “comprehensive” cooperation with “all states that are ready to find sensible solutions” for banking clients, he added.

Liechtenstein has been at the center of an international debate on tax havens since Germany's foreign intelligence service obtained data on account holders at LGT Group through an informant, whom it paid as much as 5 million euros ($7.4 million). Alois in February called Germany's probe of alleged tax evaders in Liechtenstein an “attack” on his country, a principality of 35,000 people wedged in the Alps between Switzerland and Austria.

Germany's nationwide investigation has led to tax-evasion probes in about a dozen countries, including the U.S., the Netherlands, France, the U.K. and Italy. LGT Group, the bank owned by Liechtenstein's royal family, ordered its private banking employees not to travel to the U.S. due to an ongoing probe there.

Liechtenstein, Monaco and Andorra are on a list of “uncooperative tax havens” published by the Paris-based Organization for Economic Cooperation and Development. Germany wants to force countries with strict bank-secrecy rules to disclose information about the identity of account holders, and favors EU-wide implementation of OECD tax guidelines.

While Liechtenstein plans to cooperate more on tax matters, the country intends to maintain bank privacy laws.

“While many states are introducing the `transparent citizen,' we practice a culture of privacy that goes far beyond bank-client secrecy in tax matters,” Alois said. “Our state is here for its citizens, not the other way around.”

(Published by Bloomberg - august 15, 2008)