Liechtenstein has just announced the latest sums it has collected under the terms of the European Savings Tax Directive. It was a measly €7.8 million.
Working backwards this is 20% tax on €40 million interest. Assuming 2% interest, this is tax on interest income on € 2 billion capital (which may seriously overstate the case: German bonds paying over 3% p.a.).
Liechtenstein banks have € 140 billion assets under management.
So tax was levied on less than 2% of assets. Generously assuming only 40% of assets were fixed income then the savings tax is less than 5% effective in Liechtenstein which is no surprise with nearly 100,000 foundations, trusts, companies and anstalts in the Principality.
What is clear is that the case for reform of the European Savings Tax Directive is overwhelming given this massive failure of the existing arrangement to tackle serious tax abuse.
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The EU gets only 75% of this… i.e. some € 5 million. A real winner here.
Mark – have you seen this http://bit.ly/qG2wsc ? How does it square with your earlier comment in this http://bit.ly/riU3lQ that “This is a minor hiccup, with the Italian Finance Minister not up to scratch with the technical details. This is a tiny wrinkle that will be quickly ironed out” ?
Richard – I guess that the answer to this http://bit.ly/o18H3n is, well, no!
Don’t make me say I told you so.
We’ve been through all this before – and it will be resolved
Let’s see what Mark has to say.
My sources tell me that the article is wrong – the discussions are purely technical and neither country is objecting as reported
You have raised your own hopes far too high
OK, but I will not hold my breath just because Deep Throat said so, and neither should you.
Darren, sigh..ho hum:
Here’s a semi official reply..
Sooooo, where exactly does this leave us http://bit.ly/nQtqrX ?
Mark, I thought this was only a minor technical hicup. Richard, I thought Deep Throat had it all figured out.
Look like the the Luxembourgeois and the Austrians have used the fact that everyone is looking the other way (there is a little crisis going on at the moment) to kick this one vbery far off the field.
Games are being played
But it’s very clear – this is just timing, not substance
What is Mark saying? Still a minor technical glitch?
“Assets under management” does not necessarily mean cash or bonds or income-producing assets. Many “assets under management” do not produce income which is within the scope of the EUSD.
Wait until it is reformed
Are you aware of how extensive the changes are?
Thats why Richard said “assume 40% is invested in fixed income”. Which part of 40% did you not fully get?
Yes I’m aware of the proposals although I don’t think its certain they will go through.
The point I’m making is that the raw statistics don’t tell an accurate story.