Switzerland-Liechtenstein signed deal to exchange tax information

The year 2017 is an important one for the Swiss banking sector. As of January 1st, the country’s financial institutions are now obligated to share banking information. This new regulation effectively ends Switzerland’s reputation as a tax haven. 

The Swiss finance ministry said on Thursday it had reached a deal with Liechtenstein to exchange tax information, potentially helping to uncover billions of dollars in undeclared assets kept by Swiss citizens in neighbouring country.
“These assets will be declared and the person has the chance either to repatriate the assets to Switzerland, or he will be taxed and he keeps his money in Liechtenstein,” said Joerg Gasser, head of the State Secretariat for International Financial Matters, a branch of the finance ministry.
The amount of undeclared Swiss assets in Liechtenstein, a principality of just 38,000 people sandwiched between Switzerland and Austria, is unknown.

However, around 3.5 billion Swiss francs ($3.5 billion) could be with Liechtensteinische Landesbank, one of the country’s biggest banks, according to an estimate by Andreas Brun, a banking analyst at Mirabaud Securities LLP.

The Swiss-Liechtenstein agreement is under a global tax sharing initiative spearheaded by the Organisation for Economic Co-operation and Development (OECD).

Hovewer, yesterday Switzerland’s Federal Department of Finance launched a consultation on introducing automatic exchange of information (AEOI) in tax matters with 20 additional countries.

The countries under consideration are China, Indonesia, Russia, Saudi Arabia, Liechtenstein, Colombia, Malaysia, the United Arab Emirates, Montserrat, Aruba, Curaçao, Belize, Costa Rica, Antigua and Barbuda, Grenada, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, the Cook Islands and the Marshall Islands.

The implementation of AEOI with these nations would be from 1 January 2018, with the first exchange of information will taking place in 2019.