Liechtenstein reveals tax deal with Germany

3rd September 2009, Comments 0 comments

Liechtenstein Prime Minister Klaus Tschuetscher said that the deal would be good for Liechtenstein-German relations and would produce a supervisory process that was founded in law.

Vaduz -- Liechtenstein revealed on Wednesday that it had signed a deal with Germany on tax information exchange aimed at clamping down on tax cheats.

"The text of the treaty follows the OECD Model Convention and provides for information exchange upon request," Liechtenstein said in a statement.

Prime Minister Klaus Tschuetscher said that the deal was "good for our relations and for the first time offers a procedure governed by the rule of law for cross-border cooperation on tax matters between our two countries."

A tax evasion row between Liechtenstein and Germany a year ago unleashed international furore against countries with strict banking secrecy rules.

Germany revealed in February 2008 that it bought from a former employee of a Liechtenstein bank a list of people believed to have stashed money from German tax authorities in the principality.

This led to investigations on prominent German business executives, sports stars and entertainers, and resulted in the conviction of former Deutsche Post head Klaus Zumwinkel.

It also prompted other countries including the United States and Britain also to launch their own investigations and increase criticisms against Liechtenstein and others with strict banking secrecy traditions.

In March, Liechtenstein caved in to pressure and announced it would offer greater cooperation to other countries on tax cheats.

The Organisation for Economic Cooperation and Development (OECD) in April put Luxembourg and Liechtenstein on a list of territories which it said had not yet fully implemented international tax reporting norms.


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