Tuesday, December 9, 2008

US and Liechtenstein to exchange tax information on clients

Panama and Liechtenstein were some of the few remaining international financial centers that had not signed tax information exchange agreements with the U.S.



Press Room

December 8, 2008
HP-1320

U.S., Liechtenstein Sign Tax Information Exchange Agreement

Washington – The Department of the Treasury today announced that the United States and Liechtenstein have signed an agreement to allow for exchange of information on tax matters between the two countries. The agreement was signed by U.S. Charge d'Affairs Leigh Carter and Liechtenstein Prime Minister Otmar Hasler in Vaduz, Liechtenstein.

The Tax Information Exchange Agreement (TIEA) with Liechtenstein will provide the United States with access to information it needs to enforce U.S. tax laws, including information related to bank accounts in Liechtenstein.

The TIEA will permit the United States to seek information from Liechtenstein on all types of federal taxes, and in both civil and criminal matters. Under the TIEA, the requested information must be obtained and exchanged without regard to whether the country receiving the request needs the information for its own tax purposes or whether the conduct being investigated would constitute a crime under its law. If the country receiving the request for information does not have the requested information in its possession, it must take relevant information gathering measures to provide the requested information. Moreover, requests from one country to the other must be honored, even if the information relates to, or is held by, nonresidents.

Full text of press release in http://www.treas.gov/press/releases/hp1320.htm



AGREEMENT BETWEEN THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND THE GOVERNMENT OF THE PRINCIPALITY OF LIECHTENSTEIN ON TAX COOPERATION AND THE EXCHANGE OF INFORMATION RELATING TO TAXES

Article 1
Scope of the Agreement
The parties shall provide assistance through exchange of information that is foreseeably relevant to the administration and enforcement of the domestic laws of the parties concerning the taxes covered by this Agreement, including information concerning the determination, assessment, enforcement or collection of tax with respect to persons subject to such taxes, or the investigation or prosecution of criminal tax matters.
...
1. With respect to Article 4 of the Agreement (Definitions), the term “person” also includes foundations (“Stiftungen”) and “Anstalten.”

Full text of agreement in http://www.treas.gov/press/releases/reports/us%20liechtenstein%20tiea.pdf



Liechtenstein Police, via European Pressphoto Agency
Heinrich Kieber provided information on bank clients
.

Liechtenstein to Share Some Secrets of Its Bank

Published: December 4, 2008

Liechtenstein, under increasing scrutiny for its role as a leading offshore tax haven, has promised to partly lift the veil of secrecy shrouding billions of dollars held there by wealthy American clients and corporations.

Liechtenstein, a tiny Alpine country, will now in limited circumstances turn over to United States investigators the bank records of American clients suspected of tax evasion. The agreement also covers questionable uses of a tactic, known as transfer pricing, that is widely employed by multinational American corporations to lower their tax bills.

But there is a catch: the agreement covers only clients who are already being investigated or prosecuted for tax evasion in the United States. That hurdle makes it unlikely that Liechtenstein will open the flood gates to foreign tax authorities, who are laboring to uncover the identities of suspected tax cheats. Unlike Liechtenstein and neighboring Switzerland, which make a distinction between tax evasion and tax fraud, the United States considers them to be the same thing, and both to be crimes. Only tax fraud is a criminal offense in Liechtenstein and Switzerland...

Full text in http://www.nytimes.com/2008/12/05/business/worldbusiness/05bank.html


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