Liechtenstein to launder its offshore reputation

Liechtenstein to launder its offshore reputation
Liechtenstein says it will join the international agreement aimed at fighting tax evasion and increase transparency and international co-operation.

The government has promised to sign the Convention on Mutual Administrative Assistance in Tax Matters at the Global Forum on Transparency and Exchange of Information for Tax Purposes, which will go through on November 21-22 in Jakarta, Indonesia.

The country also committed to “implement automatic exchange of information with tax authorities worldwide and engage in bilateral negotiations to resolve the tax position”.

 “Liechtenstein has taken a very significant step today towards full transparency by endorsing the new standard on automatic exchanging of information, joining other countries in this area,” Jose Gurria, the secretary-general of the OECD said.

The Multilateral Convention allows for an exchange of information on request, spontaneous exchange, tax examinations abroad, simultaneous tax examinations and assistance in tax collection. The automatic exchange can also be performed, after the parties’ agreement.

In 2008 Liechtenstein’s finance company LGT Group suffered a data leak. The investigation showed that the company promoted hiding billions of euros belonging to hundreds of foreign citizens. After the incident, the principality faced serious pressure from the US, Germany and UK.

Liechtenstein, along with neighboring Switzerland is considered one of the leading world tax havens. In November 2013 the country was 33rd on a list of 82 in the Financial Secrecy Index list of the states with the most non-transparent financial systems.

Switzerland has also recently signed the convention. However the international research organization Tax Justice Network had put the country in the first place in a world rating of banking secrecy.