We reported in our Newsletter n°5 (April 2010) on the new national procedure adopted by the Luxem-bourg Parliament in order to comply with the inter-national information exchange procedures in tax matters resulting out of the new double taxation treaties signed by Luxembourg.
The Liechtenstein government had filed on March 30th 2010 its proposal (n°29/2010) for such a national procedure in Liechtenstein, which had been first dis-cussed by the Liechtenstein Parliament on April 22nd 2010 and adopted on June 30th 2010. The “Steueramtshilfegesetz (SteAHG)” dd. June 30th 2010 was published in the Official Gazette on August 30th 2010.
1. General principles
The proposed procedure will be applicable to infor-mation exchange either based on double taxation treaties, or on specific “Tax information Exchange Agreements” (TIEA) (such agreements having been signed already with the US and Germany).
In accordance with the OECD standards, it only re-lates to information exchange “on request” (no auto-matic information exchange) (cf. our Newsletters n°2 and 3).
Only requests which are related to fiscal years poste-rior to the entry into force of the relevant tax treaty or TIEA are admissible, except if otherwise regulated by the treaty.
A “concerned person” under the law is either:
- the resident of another country than Liechtenstein on whom information is requested or a corporate body of which this resident is the economic benefici-ary;
- any person who is concerned by the object of the requested information exchange;
- any person namely mentioned in the request.
The “information holder” is a corporate body or a person established in Liechtenstein, other than a public authority, holding information on non-residents.
As well the information holder, as the “concerned person” are to be considered as “entitled persons”.
2. Information
Information exchange is possible:
- for the levy of domestic taxes by the requesting state or in case of tax fraud; and
- under the condition that the information is held by the Liechtenstein authorities or by a Liechtenstein resident.
Information is held by a Liechtenstein resident not only if it is located on the Liechtenstein territory, but also if it is “under the control of a Liechtenstein resi-dent”, which includes all situations where the infor-mation holder has the possibility and legal capacity to access the information wherever it is located (for example a Liechtenstein wealth manager who sub-contracts accounting operations to a Swiss account-ing company).
3. Requests
Provided the individual double taxation treaty or TIEA does not contain different rules, requests from the requesting state addressed to the Liechtenstein tax authority have to comply with the following con-ditions:
- in written form, although in case of urgency they can been anticipated by other means, and the trans-mission of information will also occur in written form; and
- as detailed as possible (in order to prevent so-called “fishing expeditions”).
With regard to this second condition, requests should at least contain the following:
- identification of the “concerned person”, of the period of time for which information is sought and of the form of the requested information;
- explanation of the context of the information re-quest and of the reason why the information is “foreseeably relevant” (which includes the indication of the applicable national tax regulations);
- indication of the reasons which make the request-ing state believe that the information is held by somebody in Liechtenstein and Identification of the potential information holder (if known to the re-questing state);
- declaration that the internal investigation measures have been used without success and declaration of reciprocity (for the same kind of information).
3. Analysis of the request and grounds of rejection
Requests have to be dealt with “quickly” by the Liechtenstein tax authority, but no specific time-frame is defined by the law proposal (because of the limited resources of the Liechtenstein tax authority).
The Liechtenstein authorities verify if the request meets the above mentioned conditions. It is not only a formal control, but a real analysis of the content of the request and the information provided. This con-trol is however based on the mutual confidence prin-ciple and the Liechtenstein authorities should – ex-cept obvious incoherencies or lack of information – rely on the declarations made by the requesting state.
Requests which would violate the Liechtenstein ordre public have to be rejected, especially if the request is based on information which has been obtained as a consequence of an illegal act in Liechtenstein (misuse or theft of personal data for example), or if the matter of the request is, according to the laws of the request-ing state, time barred. This exception is to be inter-preted narrowly.
Furthermore, requests which would imply that the Liechtenstein tax authority violates its own rules of evidence collection are also to be rejected.
4. Request to the information holder
If the request meets the various conditions, the Liech-tenstein tax authority is going to request the informa-tion from either the relevant authority or from the information holder. The latter has to provide the in-formation within 14 days (with a possibility to extend this period for good reasons).
Notifications are made to the domicile or registered office of the Liechtenstein residents or to the ap-pointed representative in Liechtenstein of a non-resident. If no such representative is appointed, all notifications made to the information holder are deemed made simultaneously to the non-resident.
The information holder has to inform the person on whom information is requested (its client) of the exis-tence of the request (except if the requesting state asks for confidentiality), the possible ways to oppose to such a request and the possibility to appoint a rep-resentative in Liechtenstein.
Only the information which is really requested has to be communicated, but all such information, even if it is covered by confidentially or professional secrecy (excepted is only information held by an attorney which he has received for legal advice or in the con-text of a judicial procedure, and information which is a commercial or industrial secret).
Especially is to be revealed:
- information held by banks, financial institutions, fiduciaries, …;
- information on ownership (also if chain of owners);
- identity of associates in companies;
- identity of founder, members, beneficiaries, … of trusts or foundations.
If the information holder does not forward the re-quested information within the given period of time, an injunction can be taken by the administrative court on request of the tax authority. Such an injunc-tion may order domestic visits, hearing of witnesses, seizure of documents, …. It is executed by the tax authority, with the assistance of the police if neces-sary. It is not possible to appeal against such an in-junction (a recourse is only possible at the end of the procedure against the “final decision”).
Representatives of the foreign tax authority may have view in the files or hear the information holder, if such measures are authorized by the Liechtenstein tax authority and agreed by the information holder or the “concerned person”.
5. Settlement of the procedure and possible re-course
If all “entitled persons” agree in writing to the trans-mission of the information, it is forwarded to the re-questing state without any additional procedure.
If not, the Liechtenstein tax authority has the duty to check the received information and to decide – in a “final decision” – if (or which parts of) it will be trans-mitted to the requesting state. Indeed, it is the au-thority and not the information holder which has to decide which information is “foreseeably relevant” or not.
An appeal against the “final decision” is possible be-fore the administrative court within a period of 14 days.
