Further development of international standards

Law on judicial assistance

In Liechtenstein the law on judicial assistance was revised, and as a result the time required for the internal procedure was shortened in line with international standards.

Law on administrative assistance in tax matters and tax agreements

On 12 March 2009, the government of the Principality of Liechtenstein together with H.S.H. Crown Prince Alois von und zu Liechtenstein presented the so-called «Liechtenstein Declaration», which essentially signals the country's willingness to step up cooperation in tax matters in line with the OECD standards. Subsequently, various tax information exchange agreements (TIEA) and double taxation agreements (DTA) were concluded.

In the year under report, besides Liechtenstein, Switzerland also concluded several OECD-compatible agreements. Both countries were added to the OECD's «White list» in October and November respectively.

In order for the tax agreement with the USA to be implemented, the US administrative assistance act was passed in Liechtenstein. Together with the tax agreement between the two countries, this comes into force on 1 January 2010. As a result, the status as qualified intermediaries (QIs) – which the Liechtenstein banks also possess – was safeguarded. The QI status is granted by the Internal Revenue Service (IRS), the US taxation authority. The requirements for the award of this status are a cross-national agreement such as a TIEA or a DTA, which grants corresponding information rights, as well as an agreement between the individual bank and the IRS. In this agreement, the bank accepts the tax authority's rules and ensures that US withholding taxes are correctly deducted and earnings are reported to the IRS.

Additional tax agreements are to be implemented on the basis of a general administrative assistance law to be enacted in the second half of 2010. This law applies to already implemented tax agreements provided there are no special circumstances.

In relation to the agreement with the United Kingdom, a special administrative assistance law is planned in Liechtenstein. This regulates the disclosure programme valid until 2015 for persons liable to UK taxation and contains special obligations with regard to the treatment of UK clients.

Liechtenstein's international taxation agreements (Status: 31 December 2009)

 

 

 

 

 

 

 

OECD member

Type of agreement

Status

Date

TIEA: Tax Information Exchange Agreement
Regulates the conditions under which two contracting states agree to exchange tax information.

DBA: Double Taxation Agreement
Bilateral agreement to regulate various taxation issues and to avoid double taxation between two states.

OECD Standard:
Refers to the sample agreement on tax information exchange passed by the OECD (Organisation for Economic Cooperation and Development) in 2002. This sample agreement envisages an exchange of information on request in substantiated individual cases.

Source: Portal of the Principality of Liechtenstein, www.liechtenstein.li

St. Kitts and Nevis

No

TIEA

Concluded

14.12.2009

Antigua and Barbuda

No

TIEA

Concluded

25.11.2009

Netherlands

Yes

TIEA

Concluded

10.11.2009

Belgium

Yes

TIEA

Concluded

10.11.2009

Ireland

Yes

TIEA

Concluded

13.10.2009

St. Vincent and the Grenadines

No

TIEA

Concluded

02.10.2009

San Marino

No

DTA

Concluded

23.09.2009

France

Yes

TIEA

Concluded

22.09.2009

Monaco

No

TIEA

Concluded

21.09.2009

Andorra

No

TIEA

Concluded

18.09.2009

Germany

Yes

TIEA

Concluded

02.09.2009

Luxembourg

Yes

DTA

Concluded

26.08.2009

United Kingdom

Yes

TIEA and disclosure facility

Concluded

11.08.2009

United States of America

Yes

TIEA

Concluded

08.12.2008

Implementation of the third EU money laundering directive

Liechtenstein's banks are subject to the law on professional due diligence to combat money laundering, organised crime and the financing of terrorism, as well as the respective ordinance. As a member of the European Economic Area (EEA), Liechtenstein has incorporated the third EU money laundering directive in national law. Accordingly, the Principality has taken over the central recommendations contained in the current report of the International Monetary Fund (IMF), and therefore fulfils the highest standards in combating money laundering and the financing of terrorism.

The directive represents an important step in the international effort to combat money laundering and terrorism in Europe. Moreover, it envisages an extension and strengthening of the due diligence obligations, and it contains specific requirements concerning the identification of clients, politically exposed persons (PEPs) and correspondent banks.

Criminal law

The offences of falsification of documents, the forgery of specially protected instruments, environmental offences and market manipulation are to be added to the catalogue of predicate offences in respect of money laundering in Liechtenstein. The new ruling takes into consideration the conclusions of the IMF and the Council of Europe. Similar measures are also being taken in Switzerland. Furthermore, legal provisions regarding the criminal liability of legal entities are to be added to the criminal code.

Data protection

The existing data protection law in Liechtenstein has been revised to take into account the guidelines of the Council of Europe and the latest technical developments. The main aim of the changes is to improve the level of privacy protection. For this purpose, the use of closed-circuit cameras, the competences of authorised data protection officers, the obligation to depersonalise or destroy data, which are no longer required for their purpose, and exceptions to the obligation to report data collecting by private persons were stipulated.