German Finance Minister gets tough with Liechtenstein
07/11/2008
Peer Steinbrück, the German Finance Minister is threatening tax havens, particularly Liechtenstein with national sanctions, including the introduction of tax or customs laws or via financial regulations, in the on-going struggle to combat cross-border tax evasion and urging the European Union to toughen its stance.
Liechtenstein’s Prime Minister Otmar Hasler has reacted angrily to the criticisms emphasising that Liechtenstein was currently in constructive negotiations with the European Union (EU). Hasler confirmed his intention to conclude double tax agreements with EU states, whilst emphasising that, in return for co-operation, the interests of Liechtenstein as a business location be maintained.
EU Finance Ministers have discussed the details of a planned anti-fraud agreement, which is currently being negotiated between the EU Commission and Liechtenstein. Steinbrück has denounced the moves, referring to the proposals as "totally inadequate". A view not shared by Austria who said that they would ratify the agreement in its current state.
Germany is pressing for Liechtenstein to comply with exchange of information standards but has little chance of achieving this given that no unity on cross-border interest taxation within the EU exists.
Austria, Luxembourg and Belgium do not currently provide information on interest income earned by EU savers to their home authorities under the European Savings Tax Directive, opting to levy an anonymous withholding tax instead. Switzerland and Liechtenstein, apply the same principle.
