2008 Liechtenstein tax affair
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The 2008 Liechtenstein tax affair is a series of tax investigations in numerous countries whose governments suspect that some of their citizens may have evaded tax obligations by using banks and trusts in
Background
Millions of
Investigations
Germany
According to the lead prosecuting office responsible for economic crime in Bochum,[7] which is supported by prosecuting offices in other towns as well as the criminal police, currently about 600 to 700 individuals are suspected in the investigations. In addition, search warrants have been issued. An official confirmation about the total number of suspects and amount of money involved has not yet been issued. According to the prosecutors, current investigations provide a "very high level of evidence."[4]
The affair became known on February 14, 2008, when a raid was conducted against
According to a report by the
A number of raids were conducted in Hamburg, Munich, Frankfurt and other cities. Several banks were searched including
While the BND received the data in 2006, the LGT Group indicated that in 2002 secret information had been stolen but the informant had been caught and tried in 2003, and all material had been returned.[8]
United States
The informant also had sold data to the government of the United States. After the affair broke open, Senator
Finland
According to the LGT Bank some 20 Finns had evaded tax in Finland via accounts containing €50-60 million in deposited funds. This was the largest known tax avoidance case in Finland. Most names are secret.
Seventeen Finns paid additional taxes totalling €10 million. The taxpayers initiated actions in the Administrative Court. The decisions are not public. According to Finnish law the cost of hidden taxes can be up to 30%. In two cases shown for the reporters the Administrative Court acted c. 1% interest rate payment. In one case hidden funds were in total €483,000 and acted additional tax was €4,350. In addition to this, tax payers must pay the avoided taxes and an interest of the tax funds not paid in time. According to the Supreme Administrative Court of Finland no other legal procedures are possible, than collecting the hidden tax and its 1% interest rate.[23]
Other countries
On February 24, 2008, it became apparent that secret bank information had also been sold to the British tax authorities and that about 100 individuals in the UK are at risk for investigations for tax evasion.[24]
The informant also provided the governments of Australia, Canada and France with data.
In February 2008, The Wall Street Journal reported that the informant likely was living in Australia.[2] In 2011, Time confirmed that he had been living in the country until 2010-2011, being under the protection of the secret services of several countries. After being found by journalists in Australia, he moved to a new unknown location.[15]
Aftermath
Early reactions
The principality of
The newspaper Die Welt described the event as a "government crisis".[33] The Regent of Liechtenstein, Alois, Hereditary Prince of Liechtenstein, called the investigations an "attack" on Liechtenstein by the Federal Republic and is considering legal remedies.[6] The German government has been criticized for working with secret bank data that was stolen by the informant.[6] The head prosecutor of Liechtenstein Robert Wallner initiated an indictment "against unknown perpetrators for the violation of company secrets for a foreign country".[34] Also, two lawyers in Berlin initiated lawsuits against the BND and the Federal government claiming among others "infidelity toward the taxpayer" and "spying of data".[35]
The German government, on the other hand, is considering a coordinated international action: according to internal sources of the Ministry of Finances Liechtenstein supposedly lives to "a good part from the business of evading taxes".[36] The government may consider a number of possible actions: Liechtenstein is about to join the Schengen Agreement which would eliminate its border controls towards Austria, and Germany's consent is required; Germany could impose fees on transfers of currency, place taxes on business activities of its citizens in Liechtenstein, and require them to prove that their activities there are legitimate. Furthermore, it counts on the support of other governments who also feel the sting of tax evasion.[37]
Questions have also been raised within Germany as to the internal legality of the matter. Concerns have been voiced that the actions taken by BND were outside the agency's national security (and constitutional) remit, with attention also focusing on the wider ethical debate as to whether BND was justified in paying a €4m bribe to a bank official in a foreign country (with financing and approval from both the German chancellery and finance ministry).
Tax treaties
Liechtenstein entered negotiations with a number of countries to discuss tax avoidance issues. It reached an agreement with the United Kingdom in 2009 that will allow the about 5,000 British customers of Liechtenstein's banks that hold for them about £2-3 billion in secret accounts to come clear with British tax authorities under terms of a significantly reduced penalty.[40] The agreement would open up Liechtenstein's banks to greater transparency, but remains controversial in Liechtenstein; some banks fear that clients will just move their money elsewhere.[40]
References
- ^ "Skandal gigantischen Ausmaßes". Süddeutsche Zeitung (in German). 2008-02-15. Archived from the original on November 3, 2008. Retrieved 2008-02-21.
- ^ a b c Esterl, Mike; Simpson, Glenn R.; Crawford, David (2008-02-19). "Stolen Data Spur Tax Probes". The Wall Street Journal. Google Groups. Retrieved 2008-02-20.
- ^ Keuchel, Jan; Andresen, Tino (2008-02-16). "Nächste Woche knallt es wieder". Handelsblatt (in German). Archived from the original on 2008-02-19. Retrieved 2008-02-21.
- ^ Agence France Presse (in German). 2008-02-15. Archived from the originalon 2008-03-09. Retrieved 2008-02-21.
- ^ "German Banks Suspected of Helping Clients Evade Taxes". Der Spiegel. 2008-02-21. Retrieved 2008-02-21.
- ^ a b c Pfanner, Eric; Landler, Mark (2008-02-19). "Liechtenstein defends its banks in German tax-evasion inquiry". International Herald Tribune. Retrieved 2008-02-20.
- ^ "Press release of the prosecuting office, Bochum" (DOC) (Press release) (in German). 2008-02-15. Retrieved 2008-02-15.[dead link]
- ^ a b c Dougherty, Carter; Landler, Mark (2008-02-18). "Tax Scandal in Germany Fans Complaints of Inequity". The New York Times. Retrieved 2008-02-20.
- ^ a b c Moore, Matt (2008-02-18). "Germany expands probe of Liechtenstein tax evasion". USA Today. Associated Press. Retrieved 2008-02-20.
- ^ "Liechtenstein tax scandal hits banks". The Australian. Reuters. 2008-02-19. Archived from the original on 11 August 2011. Retrieved 2008-02-20.
- ^ Kiebler's profile @ Liechtenstein's police website Archived March 17, 2008, at the Wayback Machine
- ^ Eppelsheim, Philip (2008-02-15). "Deutschland vor historischem Steuerskandal". Frankfurter Allgemeine Zeitung (in German). Retrieved 2008-02-24.
- ^ Kuhn, Friedrich (2008-02-17). "Informant im Fadenkreuz - Tippgeber von Liechtenstein muss völlig neue Identität erhalten - Fahnder rätseln über Zumwinkels Motiv". Deutscher Depeschendienst (in German). Archived from the original on 2008-03-05. Retrieved 2012-03-22.
- ^ Quinn, James (2008-08-19). "Interpol seeks Liechtenstein tax mole". The Daily Telegraph. London. Retrieved 2010-04-22.
- ^ a b Ritzer, U. (3 August 2011). "How a Tax-Evasion Whistleblower Became One of Europe's Most Wanted". Time. Retrieved 1 March 2023.
- Spiegel Online(in German). 2008-02-19. Retrieved 2008-02-24.
- ^ Tartler, Jens; Ehrlich, Peter; Lockhart, Ina; Lambrecht, Matthias (2008-02-19). "Razzia bei deutschen Privatbanken". Financial Times Deutschland (in German). Archived from the original on 2008-02-23. Retrieved 2008-02-24.
- ^ AFP (2008-02-21). "Sen Levin Concerned Liechtenstein Bank Drawing Tax Evaders". Morningstar. Retrieved 2008-02-23.
- ^ "USB, Liechtenstein Aided US Tax Cheats: Senate". Associated Press. 2008-07-17.
- ^ Kaikkien aikojen veronkiertotutkinta kuivui kokoon - varoja piilottaneet suomalaiset jäävät ilman rikosseuraamuksia yle 18.9.2013
- ^ Supreme Court ruling hobbles Liechtenstein tax probe Yle 19.9.2013
- ^ Bertel Pauligilla veroparatiisitili 9.10.2013 A9
- ^ Liechtensteinin veronkiertojutussa on määrätty hyvin pieniä veronkorotuksia yle 16.12.2013
- ^ Watts, Robert; Matthew Campbell; Nicola Smith (2008-02-24). "Revenue men prise open princely tax haven, Liechtenstein". London: The Sunday Times (Timesonline). Retrieved 2008-02-24.
- ^ a b "Deutschland verschenkt Steuersünder-Daten an Regierungen in aller Welt". Der Spiegel. 2008-02-26. Retrieved 2008-02-26.
- ^ a b "Monaco vows to help German tax probe". The Financial Times (ft.com). 2008-02-24. Retrieved 2008-03-05.
- ^ "Skat lun på omstridt Liechtenstein-papir". Berlingske. 2008-02-20. Retrieved 2020-09-26.
- ^ "Affäre Liechtenstein. Steuerskandal erfasst Europa und die USA". Der Spiegel. 2008-02-26. Retrieved 2008-02-26.
- ^ Mohan, Vishwa (2008-05-21). "Germany offers black money data, India dithers". The Times of India. Archived from the original on 2012-10-21. Retrieved 2008-05-21.
- ^ "Liechtensteins Ruf ist ruiniert". Die Welt Online (in German). 2008-02-15. Retrieved 2008-02-24.
- ^ "Regierungschef Otmar Hasler bei Bundeskanzlerin Angela Merkel" (Press release) (in German). 2008-02-15. Archived from the original on 2008-03-05.
- ^ Pfanner, Eric; Landler, Mark (2008-02-20). "Tax Inquiry? Principality Is Offended". The New York Times.
- ^ "Tausende Verdächtige in Steueraffäre". Die Welt Online (in German). 2008-02-15. Retrieved 2008-02-24.
- ^ Head Prosecutor of Liechtenstein initiates indictment "against unknown perpetrators" (MP3). Radio-Liechtenstein. Retrieved 2008-02-24.[dead link]
- ^ "Strafanzeige gegen BND und Bundesregierung". Netzeitung (in German). 2008-02-19. Retrieved 2008-02-24.
- ^ "Berlin will Geschäfte mit Liechtenstein radikal einschränken". Spiegel Online (in German). 2008-02-19. Retrieved 2008-02-24.
- ^ Dougherty, Carter; Landler, Mark (2008-02-21). "Germany Prods Liechtenstein to Fight Fraud". The New York Times. Retrieved 2008-02-22.
- ^ "Not so fine in Liechtenstein". The Economist. 2008-02-22. Retrieved 2008-06-03.
- ^ "Fall Heinrich Kieber: Deutschland lehnt Rechtshilfegesuch ab". Liechtensteiner Vaterland. 2009-03-23. Archived from the original on 2009-05-28. Retrieved 2009-04-16.
- ^ a b Simonian H (August 12, 2009). "Liechtenstein in talks with Germany on transparency". Financial Times.
External links
- "Tax Me If You Can", Australian Broadcast Commission TV, Four Corners page including streaming video, reporter Liz Jackson, first broadcast on 6 October 2008.