Liechtenstein Prime Minister Klaus Tschuetscher said the principality will seek a withholding tax on undeclared German assets in its banks along the lines of a recently signed German-Swiss tax agreement, Die Zeit reported.
Liechtenstein's government is in talks with Germany's Finance Ministry about an agreement and Tschuetscher said he prefers new rules to take effect next year at the same time as the Swiss accord, he told the newspaper in an interview. There should be no regulatory gaps between Switzerland and Liechtenstein with respect to Germany, he said.
Well of course Liechtenstein wants that. Since the vast majority of assets in Liechtenstein are held in structures where there are no legal owners no assets will need declaration but the appearance of compliance and cooperation will be high whilst the game of abuse goes on.
This is what Dave Hartnett at HMRC set in motion by signalling the UK would sign such a deal. It's still not clear Germany will, but he did for the UK presumably with the approval of George Osborne.
Remember that when you can't get the medical services you need or your children can't get the education they need: the Tories have gone out of the way to help the rich keep their assets well out of reach of tax authorities here and elsewhere, and deliberately so.
That's the reality of what is happening. It's neo-feudalism in action.
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We are beginning to recognize the correlation between tax rates and tax revenue — and that the higher a country’s tax rate the more likely corporations will evade paying tax by seeking “amenities” provided by too-clever-by-half bankers, lawyers, accountants (and slimy politicians who profit from their activities) based in the Crown Dependencies (not forgetting Liechtenstein.)
Richard rightly prohibits the word “pigsties” to describe the centre-of-operations based on these (often scenic) islands lest this harms the reputation of the majority of honest, indigenous inhabitants, but their governments have allowed the rich to prosper at the expense of the world’s greater population.
Every business, giant corporations in particular, are wholly dependent on the host government providing a commercially friendly infrastructure, including: – educated work force supported with health and retirement facilities, roads, communications systems, utilities (heat, light and sewage disposal) and many other amenities which enable business to grow and profit.
If pre-tax profits are then exported for plastic surgery in secretive tax havens then nobody benefits except a rich elite. This is extremely damaging to UK citizens and in Africa it murders people… By the million.
Close tax havens. Start with the Isle of Man, Jersey and Guernsey.
Not forgetting Liechtenstein
Some bits you are missing. HSBC keep releasing data to various authorities, while people like Richard bang on about tax abuse. Why? Hong Kong. If security of data in European jurisdictions is seen as being increasingly unreliable, people will move their money away from European jurisdictions. This includes most tax havens which are under European control. So, where to? Hong Kong, of course. HSBC/ China win the investment, Europe becomes finanacially devastated.
If you want to prevent this, you need to not only keep the tax havens open, but get them working harder for you.
Ah Yes Hong Kong … The place the British set up as an “anything-goes-no regulation-centre” and the place where today most of the corruption in China is conducted from.
The perfect alternative for the fat cats of European big business – who represent less than 1% of the population – to remodel cash in convoluted financial anaplasty knowing that this will lead to Europe’s financial devastation.
And to prevent this tarnished cash from travelling to such a pleasant place we need not only keep Jersey, the Isle of Man and Guernsey “open” by becoming even more secretive and devious to ruin everyone’s standard of living – and kill off a few more million Africans.
Apart from the fact that you will NEVER ordinarily see the word “open” and the Crown Dependencies in the same sentence this can only have been written by an offshore banker, or acolyte.
SOMEWHAT OFF-TOPIC: – It is becoming increasingly odious to be known as a “banker”.
And prefixing this address with the word “off-shore” at least doubles the odium.
Richard – Germany and the other European German-speaking countries do not care what the UK’s tax commissioner or finance minister do or do not do. The UK government’s actions are of no relevance whatsoever to their policy decisions.
In this case in fact, it was Germany that initiated the negotiations with Switzerland that produced the recent bilateral agreement, having become frustrated with the EU’s pathetic failure to push through the revisions of the EU savings directive (and after Luxembourg and Austria had told the German government that automatic exchange of information was simply never going to happen). The UK simply jumped on the bandwagon and had to convince Switzerland that it was worth doing a similar deal.
Liechtenstein is involved in all the formal and informal government gatherings between German-speaking countries. It is natural that Germany and Liechtenstein will now agree a similar deal to that of Switzerland.
They do worry what the EU thinks and it will not accept the German deal
It contravenes eu agreements e.g. On rates
It was Switzerland who initiated Rubik… Not Germany! The Swiss Foreign Bankers Association were first to propose the idea.
Mark – you may be right (I am sure you are actually) that is was the Swiss Bankers Association that first put the idea forward.
But it is definitely Germany that started the political process to make it happen, with a little help from Austria and later Luxembourg. It was Germany who decided they had enough of the EU wasting its time, and initiated the negotiations of the bilateral agreement.
There is no evidence at all to support that idea
Oh yes there is plenty of evidence. Read this (dated January 18, 2010, http://bit.ly/rrhg9a) from the Austrian Chancellor’s office, and even translated!
“Minister Pröll pleads for summit of German-speaking countries
A summit meeting of the German-speaking European countries will be held to give impetus to the stagnating negotiations of the EU ministers of finance on banking secrecy and interest tax on savings. This was agreed on between Austrian Finance Minister Josef Pröll and his German counterpart Wolfgang Schäuble at a meeting in Berlin on 16 January 2010 as no solution of the conflict was in sight at the Council of EU Finance Ministers on 19 January 2010.
Besides Germany, Austria and Luxembourg, also “countries outside the EU such as Switzerland” should participate in the summit meeting next week, stated Pröll after his talks with Schäuble. This was the first bilateral meeting with the new German minister of finance after the change of government in Germany.
Austria and Luxembourg still reject the automatic exchange of information (and consequentially the end of banking secrecy) as long as third countries such as Switzerland do not enter into similar agreements. Expressing “general reservations”, Austria and Luxembourg continue to block the respective EU directives and treaties. Austria would not change its position on the tax package at the EU meeting on 19 January 2010, “if the Commission and Council do not allow a solution”, stressed Pröll vis-à -vis the Austrian Press Agency (APA) and Austrian Broadcasting Corporation (ORF). According to Pröll, Schäuble showed “understanding” for Austria’s position.”
This is where it all started…..
That proves a bunch of tax havens managed to talk to Germany
Wow
You call that evidence?
That’s as good a fantasy as some real economic activity happens in a Liechtenstein Anstalt
Well Richard, going by your logic, it looks like these alleged tax havens were pretty damned successful in engaging Germany, weren’t they?
But do you really think that Germany, Europe’s largest single member state and dominant economy would have done this deal if it did not think that there was something in it for it. Give the Germans some credit: they have shown us many times before that they are far from stupid.
Oh, so that’s why it’s not at all sure it will be approved by Germans is it?
Germany will ratify the deal. You and others seem to believe that because the Merkel administration does not have a majority in the upper chamber, the deal may be rejected. That ignores the realities of German federal parliementary politics. Just like the Senate, Germany’s upper chamber is a dealing room, where votes and favours are traded. Merkel can “buy” a few votes if she needs to.
The real risk to the deal is on the Swiss side. The right is feeling that Switzerland is selling its soul, throwing away over 250 years of banking secrecy (and throwing thousands of foreign depositors under the bus) so that some bankers (lead by the luminaries of UBS) can have better access to the German market. It does not “sell” very well. My informed guess at this stage is that is 50:50.
I see you admit that Germany, and with it the rest of German-speaking Europe, really does not care about what the UK does or does not do. So let’s stop making baseless statements such as “This is what Dave Hartnett at HMRC set in motion by signalling the UK would sign such a deal”, shall we? The UK did not set anything in motion. It is, as with most European matters, a follower of Germany’s leadership.
Now regarding Germany’s concern about the EU’s views on its bilateral agreements, you may want to get a few facts right.
First, the idea that the EU could object to the withholding rate under Rubik (26.375%) on the basis that it is lower than the rate under the current EUSD (35%) is baseless. The 35% applies in the context of the withholding regime, whereas Germany and Switzerland have made it unequivocally clear that Rubik constitutes “automatic exchange”. You cannot compare the two rates because they apply to fundamentally different disclosure regimes.
Second, Rubik does not breach any EU legislation, because such legislation does not apply in the context of an agreement between Germany and Switzerland, as the latter is not an EU member state. So the EU could only challenge Germany for entering into this agreement but would then face the problem is that tax is a national matter over which the EU has no jurisdiction; Germany is free to tax its residents as it pleases. The EU could theoretically challenge Germany on the basis that the agreement somehow breaches other EU treaty obligations, but that would be a very high hurdle to clear. Take it for granted that both Germany and Switzerland’s advisers have taken considerable care to address this risk in the drafting of the agreement.
Finally, what would the EU do once Germany rebuffs its challenge, as it undoubtedly will? Do you really imagine that the EU would sue Germany over this, while at the same time asking the German government for trillions of Euros of support to bail out the continent (and save the jobes of the EU officials in charge)? Please, get real…..
Here is one nugget of hope for you: there is increasing background noise in the Swiss political circles that the agreement may not be ratified by Switzerland’s legislature. At present at least, the votes are not there, and the positions on both the right and the left seem to be hardening.
There’s just one problem with you commentary – apart from the last para it’s wrong
What is wrong Richard? What is the basis of your disagreement with the earlier comment?
And what claimes do you make to have any understanding of the Swiss political process? Do you even speak (Swiss-) German?
Darren (or should I say Alien Eduardo,, your nom-de-plum used on other sites with the same inane logic)
You say EU Commission won’t sue Germany???! That’s a line worthy of opening monologue at the Apollo.
could you please explain on what basis the EU Commission would sue Germany. That would be interesting.
Editor note: most of this comment was deleted
You can try to abuse me if you wish but not other commentators
ok Richard, but if you look at Mark Morris’ earlier comment, you will have to agree that he started it. The “monologue at the Apollo” comment is rather personal.
I do not wish to abuse anyone, but if provoked I should be allowed to respond.