Monday, July 16, 2012
Liechtenstein’s Deputy Prime Minister Martin Meyer has recently held talks with Chinese delegates in Vaduz on a bilateral tax information exchange agreement (TIEA) between the Principality and China, aimed at strengthening future tax cooperation.
The Chinese delegation were also updated on the current framework conditions of the Liechtenstein financial centre during the course of their visit.
Commenting on the outcome of the discussions, Deputy Prime Minister Meyer underlined his confidence that the conclusion of a tax information exchange agreement with China would be the start of comprehensive tax cooperation between the two countries.
In a next step, negotiations on a double taxation agreement (DTA) could be initiated, the Liechtenstein minister explained, highlighting the already strong economic relations with China, which could “without doubt be further extended and deepened”. A DTA would serve to ensure legal certainty in this relationship and at the same time reduce barriers to cross-border services and investment, Meyer added.
Liechtenstein recognized implementation of the Organization for Economic Cooperation and Development (OECD) standards on transparency and information exchange in tax matters with its Declaration of March 12, 2009, Meyer ended.
The Liechtenstein government has also recently passed an amendment to the UK TIEA Ordinance, designed to set clear parameters for the relevance of business relationships.
According to the Liechtenstein government, the existing ordinance, which defines under which criteria a financial intermediary may consider a customer relationship to be relevant under the law, contains several imprecise legal terms that are “open to interpretation”.
Consequently, after consultations with the associations and based on the UK TIEA Act, the government adopted a clarification to the legislation for the relevance of new business relationships.
Liechtenstein’s Prime Minister Klaus Tschütscher explained that: “As a result, concrete threshold values are now used to establish clear criteria for confirmation of relevance within the framework of the Liechtenstein Disclosure Facility (LDF).”
The drafting of a confirmation of relevance by a financial intermediary in Liechtenstein is a criterion for participation in the LDF. A differentiation is thereby made between banks, trust companies and insurance companies.
The LDF is a unique and time-limited opportunity that allows British taxpayers to declare assets that have not yet been declared and that are liable to taxation in the United Kingdom under particularly reasonable conditions.