Monaco pledges tax cooperation with Germany

28th February 2008, Comments 0 comments

The deal came after Prince Albert II met Merkel in Berlin.

Berlin -- Monaco has pledged to cooperate with Germany in countering tax evasion, a German government spokesman said after Prince Albert II met Chancellor Angela Merkel in Berlin on Wednesday.

Albert had given his approval to a cooperation agreement aimed at improving the flow of information on tax evasion, money laundering and corruption between the relevant authorities in the Mediterranean principality and Germany, the spokesman said.

Merkel expected Monaco to abide by the guidelines of the Organization for Cooperation and Development (OECD) on fair tax practices, he added.

Earlier Merkel's spokesman stressed that the circumstances of the meeting were very different from those last week when she met Liechtenstein Prime Minister Otmar Hasler.

The meetings come amid a widening scandal over tax evasion carried on through Liechtenstein's banks.

"Monaco is not Liechtenstein," government spokesman Thomas Steg said, stressing that Monaco had shown greater willingness to cooperate with the European Union and bilaterally with Germany on financial transparency.

But he noted that the OECD continued to see Monaco, Liechtenstein and Andorra as "uncooperative" in the area of unfair tax competition.

Speaking to a German newspaper ahead of the meeting, Albert said Monaco's banking system aimed to serve as a model.

"The principality has been striving for several years to adapt our banking system to international prudential rules," the prince told the daily Frankfurter Allgemeine Zeitung.

Albert said Monaco was applying European Union guidelines on interest, taxing interest income at source at the rate of 15 percent currently. This was to rise to 20 percent next year, he said.

He added that he intended to expand the financial services offered, possibly through trading in environmental funds and emissions.

DPA with Expatica

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