Commentary

A6.1215 UK tax agreement with Liechtenstein

Administration and compliance

A6.1215 UK tax agreement with Liechtenstein

A6.1215 UK tax agreement with Liechtenstein

In August 2009 HMRC announced an historic agreement between the governments of Liechtenstein and the UK aimed at increasing tax transparency. They agreed to exchange and share information and to put in place an arrangement whereby, by 2015, all UK-based persons holding assets in Liechtenstein should be paying UK tax at the appropriate rate.

Background

Following the theft of personal data in relation to UK citizens holding assets, some of which were untaxed in the UK, the Liechtenstein and UK governments held talks on co-operating on tax matters. The result was the signing of two agreements between Liechtenstein and the UK:

  1.  

    •     a Tax Information Exchange Agreement (TIEA) to enable the countries to exchange and share information relevant to the determination, assessment and collection of taxes, the recovery and enforcement of tax claims, and the investigation or prosecution of criminal tax matters. This entered into force in the UK on 2 December 20101

  2.  

    •     a Memorandum of Understanding (MOU) supported by way of a Joint Declaration. The MOU provides for the introduction:

    1.  

      –     by Liechtenstein of a five-year taxpayer assistance and compliance program under which financial intermediaries in Liechtenstein will need to be satisfied that, where appropriate, clients are declaring Liechtenstein investments to HMRC. To do this, they must identify and write to 'relevant persons' asking them to provide a certificate to confirm that they are fully UK tax compliant. Relevant persons are any clients who may have a tax liability in the UK

    2.  

      –    

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