Showing posts with label liechtenstein. Show all posts

Thursday, August 5, 2010

Swiss lawyer indicted in US after advising HSBC client

Felix Mathis, a Zurich-based lawyer at Froriep Renggli LLP, allegedly helped Dr. Andrew Silva, of Virginia, conceal from U.S. authorities foreign bank accounts at HSBC, according to an indictment filed last week at federal court in Alexandria.

A warrant has been issued for Mathis' arrest, but he is not yet in U.S. custody.

The pair used a Liechtenstein trust called Pentruvoi Trust to hide the existence of the Swiss accounts, according to the indictment.

Dr. Silva admitted his role in the transaction and received a sentence of 2 years probation. He admitted not having reported funds held at HSBC Holdings Plc. An HSBC spokeswoman declined to comment. More in http://www.businessweek.com/news/2010-06-15/surgeon-avoids-prison-for-plotting-to-hide-hsbc-cash-update1-.html

HSBC claims it does not condone or assist tax evasion http://in.reuters.com/article/idINTRE66E74S20100715However, its website advertises the benefits of offshore banking http://www.offshore.hsbc.com/1/2/international/offshore-banking and its potential tax benefits http://www.offshore.hsbc.com/1/2/international/offshore-banking/tax-benefits

Copy of the indictment in USA v Felix M. Mathis, No.1:10-CR-260 in the U.S. District Court in the Eastern District of Virginia can be read at http://www.scribd.com/doc/34434671/USA-vs-Felix-Mathis

Thursday, April 29, 2010

WRS | Exploring 'the Liechtenstein solution' to banking secrecy

Monday, 15 February, 2010
WRS Exploring 'the Lichtenstein solution' to banking secrecy

Finance Minister Hans-Rudolf Merz met with his counterparts from German-speaking countries at an informal summit in Luxembourg last night. He reportedly told leaders from Austria, Germany, Luxembourg and Lichtenstein that despite the pressure over banking secrecy, Switzerland wouldn’t accept total information exchange with foreign tax authorities. But the Sunday papers say Bern is nevertheless weighing its options to ease pressure over banking secrecy. And Switzerland could find inspiration in our tiny neighbor to the east: Lichtenstein. WRS’s Mark Butcher spoke with our reporter Jordan Davis, who’s been following the story: --> -->

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.

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

By LYNNLEY BROWNING

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

Monday, April 28, 2008

Liechtenstein foundations become less atractive with secrecy breach

Modern private foundations (Stiftungs) are a
creation of Liechtenstein, a small Principality
nestled between two neutral countries of
Switzerland and Austria. Along with the
Establishement (Anstalt), Liechtenstein provides
structures which are used to hold assets in bank
accounts protected by legal confidentiality.

Early 2008 has shaken the confidence of the
confidentiality in Liechtenstein with the sale by
two bank officials of the names of bank account
holders to taxx authorities of Germany, Spain,
Portugal and - according to Der Spiegel - even
the U.S. http://www.spiegel.de/international/business/0,1518,537640,00.html

Former LGT-Liechtenstein Landesbank bank official
Heinrich Kieber
<http://www.spiegel.de/international/business//international/business/0,1518,535768,00.html>sold
a DVDs to the German Financial Intellegence
agents for close to €5 million ($7.4
million). Spanish investigators were after
Kieber for a 1996 fraudulent real estate deal in
Barcelona, which had earned Kieber 600,000 Swiss
francs ($553,000). He apparently fled to
Argentina before returning to Liechtenstein,
where he began working for LGT Bank in April
2001. More than half of the investors and about
3,100 foundations and establishments on the DVDs
are from abroad. Some are part of organized crime
in the Balkans and in Russia, including both
well-known and relatively unknown companies.

Unlike in Germany, where foundations serve a
specific not-for-profit purpose , the law in
Liechtenstein and Panama allows the founders of a
foundation to benefit themselves and their
dependents. Tax rates for foundations in
Liechtenstein are also very low and are exempt
from property, earned income and profit taxes.
Only an annual capital tax needs to be paid,
which amounts to 0.1 percent of the paid capital
or 1,000 Swiss francs (620 euro/$904), whichever
is greater. For capital valued between 2 million
Swiss francs and 10 million Swiss francs, the tax
rate is 0.075 percent. Capital valued above 10
million Swiss francs is taxed at a rate of 0.05
percent. Liechtenstein foundations are
available for US$3,000, while Panama Foundations
are available for US$950 and not taxed on income
from non-Panama activities (including interest from Panama bank accounts).

German tax authorities have no problem with
interest made in Liechtenstein as long as it is
declared in tax filings. To keep the money hidden
from German financial officials , according to
the DSTG, many people start foundations using a
name that doesn't identify the founder and
entrust the foundation's management to a trustee.
According to DSTG estimates, within
Liechtenstein's 160 sq km, there are roughly
80,000 letterbox companies , many of which share
an official address with many foundations. To
hide even more tracks from the tax investigators,
the foundation's capital can be deposited in a Swiss bank account.

Switzerland and especially Liechtenstein have
very strict bank secrecy . This is supposedly
part of Liechtenstein's "basic attitude and
tradition," as the country's Web site says.
Financial institutions in Liechtenstein strictly
reject all requests for account information even
from German tax investigators.

It remains to be seen how long secrecy
last. Just before the Kieber debacle, the
Liechtenstein government announced
<http://www.liechtenstein.li/en/eliechtenstein_main_sites/portal_fuerstentum_liechtenstein/fl-staat-staat/fl-staat-aussenpolitik/fl-staat-aussenpolitik-aktuell/fl-staat-aussenpolitik-aktuell-presse.htm?&show=15&pmid=94536>amendements
to the foundation law to be circulated for consultations.