Liechtenstein signs taxation agreement with Luxembourg

[R.A. Hettinga]

<http://www.telegraph.co.uk/expat/6099680/Liechtenstein-signs-taxation-agreem
ent-with-Luxembourg.html
 >

The Telegraph

Liechtenstein signs taxation agreement with Luxembourg

The bilateral; document is the third to be signed by the principality
since March and signals more openness in its banking practices.

By Emma Hartley
Published: 9:41AM BST 31 Aug 2009
Liechtenstein's bilateral agreement with Luxembourg is the third such
agreement it's made.

The principality of Liechtenstein has signed a double taxation
agreement with Luxembourg, which represents a step away from its
historical identity as a tax haven.

The agreement will promote the exchange of data between the two small
countries that will allow each to clamp down on tax cheats.

This is the third such treaty to be signed by Liechtenstein  the
previous two were with the United States and Germany.

The agreements, which conform to standards recommended by the
Organisation for Economic Cooperation and Development, are the result
of a process that began in February with the sale to the German
intelligence service of a list of Germans who banked with the LGT Bank
in Liechtenstein.

The disc was sold for #3.75 million by a former employee of LGT and
resulted in scandal in Germany, where the boss of Deutsche Post, Klaus
Zumwinkel, was forced to resign when his name was found to be on the
list of alleged tax evaders.

Sarah Doig, the chargi daffairs at the British embassy in Bern, which
has responsibility for Liechtenstein as well as Switzerland, said that
the movement for compliance with the OECDs rules got more urgent in
March at the G20 summit in London.

At the moment Liechtenstein is on a grey list of countries that are
less than completely transparent on these matters, she said.

The target number of such agreements to get off the list is 12.
Switzerland has initialed 12 already but Liechtenstein is a tiny
country with only a very small number of civil servants. Its working
on it.

Prince Alois, Liechtensteins head of state, recently expressed the
hope that its know-how in wealth management would allow his country to
remain a major financial centre despite the rule change.

Liechtenstein recently made a tax information exchange agreement with
Britain, which is a step towards a double taxation agreement.