18.03.2019

Peer review successfully completed: OECD Global Forum once again attests Liechtenstein a high degree of compliance with international tax standards

Liechtenstein complies with the international standards of the OECD on the exchange of information for tax purposes. The report by the Global Forum on Transparency and Exchange of Information for Tax Purposes (Global Forum) finds that the legal framework and practice in Liechtenstein are to a large extent compliant with international standards on administrative assistance in tax matters. In its peer review, Liechtenstein again received an overall rating of "Largely Compliant". The report was published today in Paris.

The Global Forum reviews compliance with the administrative assistance standards developed by the OECD by means of peer reviews. The second round of reviews by the Global Forum, which currently has 154 members, began in 2016. Liechtenstein's review process began in January 2018 and concludes with the publication of the report. In addition to practical implementation of exchange of information on request and implementation of the recommendations from the last peer review report published in 2015, application of the FATF-compliant definition of beneficial owners and implementation of the obligation to respond to group requests were also reviewed.

The report acknowledges the legal and practical measures taken by Liechtenstein by examining ten individual criteria. The report finds that in Liechtenstein, the necessary information on beneficial owners of companies and other legal entities as well as accounting documents and bank information are available in accordance with the international requirements. The competent authorities are able to access the relevant information in the event of a request from abroad. Exchanges with Liechtenstein's treaty partners are also assessed positively. In terms of the ratings of several individual criteria, Liechtenstein has significantly improved and, above all, it has corrected the two existing unsatisfactory ratings. This is the result of Liechtenstein's consistent  implementation of international standards. "The Liechtenstein Government attaches great importance to compliance with international standards. This report shows that we are implementing this thoroughly," said Prime Minister Adrian Hasler, expressing his satisfaction about the report from Paris. "Compliance with international and European regulatory standards is a prerequisite for market access and the competitiveness of the Liechtenstein financial centre. We have clearly stated this in our financial centre strategy presented in February 2019. It is gratifying that once again today, this strategic orientation has been confirmed as absolutely correct."

The Global Forum also identified certain shortcomings in individual areas that could impair effective administrative assistance and made recommendations in this regard. The Global Forum recommends that the supervision of companies and trusts that have received the tax status of private asset structures (Privatvermögensstrukturen, PVS) be strengthened so that all accounting records are available at all times. In addition, the Global Forum identifies points in the legal design of the administrative assistance proceedings where it cannot be ruled out that they might impair the effective exchange of information. This concerns in particular the information obligations of Liechtenstein financial intermediaries in administrative assistance proceedings. In addition, the Global Forum calls on Liechtenstein to continue monitoring the interpretation of the criterion of the "foreseeable relevance" of the information requested and the application of the "ordre public" reservation, although the report finds in principle that the exchange of information functions in practice. Only very few countries grant such extensive legal protection to persons affected by administrative assistance proceedings. Liechtenstein therefore needs to ensure that this does not lead to an undue restriction on exchange of information in compliance with the standards.

"The Global Forum's assessment is a great success for Liechtenstein and its financial centre strategy. It is of surpassing importance for the business location," the Prime Minister said. "The credibility and effectiveness of Liechtenstein policy and its implementation in law and practice are thus further underscored." The Government will examine the recommendations made and take measures to implement them.

 


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