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Liechtenstein to weaken asset and tax protection

July 6, 2011

Liechtenstein’s government has recently submitted a proposal for consultation, which aims to extend legal assistance in criminal tax matters by implementing changes to the Principality’s existing legal assistance law and by agreeing to the additional protocol to the European legal aid agreement.

Under current law, providing legal assistance in criminal tax matters is strictly prohibited. Liechtenstein’s government maintains in its release, however, that although there are three exceptions to this, the provisions are currently very limited both as regards their content and as regards the circle of countries with which such requests are accepted.

The government explains that with its declaration of March 12, 2009, Liechtenstein agreed with the states concerned to implement international standards pertaining to an exchange of information in tax matters. It notes that in the tax information and double taxation agreements that have so far been concluded, the Principality has pledged to provide comprehensive mutual assistance, including searches and seizures, some of which fall outside of its own criminal tax proceedings.

Consequently, the government argues that such restrictive legislation in the area of legal assistance in criminal tax matters is inconsistent with its newly adopted strategy and therefore carries a very real risk to the country’s reputation, which, it emphasizes, should not be underestimated.

Liechtenstein’s government has therefore proposed that the scope for providing legal assistance in criminal tax matters be widened. It has also underlined the need to agree to the additional protocol to the European agreement on legal assistance in criminal matters, and suggested that the general fiscal reservation provided for under article 51 of the country’s legal assistance law (RHG) should be removed and replaced by the introduction of a new article 51 paragraph 1 providing that limited legal assistance should also be permitted in the case of tax evasion.

The consultation period is due to last until July 29.

www.taxmoneyhavens.com

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