The treaty provides “special conditions to encourage the self-declaration of clients of Liechtenstein’s financial service industry with tax arrears in the UK between 2010 and 2015.” In return, Liechtenstein commits itself to ensure tax compliance of British clients.
British and Liechtenstein authorities will work together to provide guidance on the tax treatment of customers of Liechtenstein financial intermediaries.
The agreement includes a reduced period for assessing outstanding tax claims and the option of flat rate taxation for existing and new clients.
According to a Financial Times report, around 5,000 British investors with £2bn-£3bn in secret Liechtenstein bank accounts will be asked to disclose their details under the the terms of today’s deal.
Prime Minister Dr. Tschütscher says: “With this agreement we are creating a stable and reliable regulatory framework and for the client the possibility to make use of an attractive option.”
Beyond this agreement, both states will take up negotiations on a double taxation agreement.
In June 2008, Liechtenstein offered EU states the OECD standard on international cooperation in tax matters within the framework of bilateral agreements.
On March 12 2009, Liechtenstein expanded this offer and recognised the OECD standard as a binding global standard.