Liechtenstein and Britain have signed an agreement to encourage British clients of banks in the Alpine principality to voluntarily disclose untaxed money.
The Liechtenstein government said in a statement the deal provided special conditions between 2010 and 2015 to encourage clients with British tax arrears to declare themselves.
The conditions, including a reduced period for assessing outstanding tax claims and the option of flat-rate taxation, are available for existing clients as well as new clients.
“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,” said Lichtenstein's prime minister, Klaus Tschuetscher.
The Financial Timessaid today that about 5,000 British investors with an estimated £2 billion to £3 billion in secret Liechtenstein bank accounts will be asked to reveal details under the deal.
Finding a non-punitive way to bring undeclared cash onshore is a challenge for European offshore centres such as Liechtenstein and Switzerland after they agreed in March to relax their strict bank secrecy rule in tax evasion matters.
Facing a crackdown on tax evasion by G20 countries, Liechtenstein said in March it was willing to embrace standards for tax co-operation set by the Organisation for Cooperation and Economic Development (OECD).
Liechtenstein said today it was also starting negotiations with Britain on a double taxation agreement.
Liechtenstein had been under pressure since Germany obtained last year confidential data on bank LGT, the country's largest bank, with names of German citizens hiding money in the tiny principality, wedged between Switzerland and Austria.
Reuters