Liechtenstein Tax Conference Focuses On AEI
The inevitable march towards automatic exchange of information (AEI) as the Organization for Economic and Cooperation’s (OECD) global standard was just one of the issues discussed at a recent international tax conference held in Liechtenstein.
During his address, Head of the OECD International Cooperation and Tax Administration Division, Achim Pross, confirmed that the new AEI standards will be drafted swiftly, given the Group of Twenty nations’ (G20) support for the plans.
“The train has left the station and is quickly gathering pace,” Pross said, referring to the current state of the negotiations within the G20 group. Countries that have signed up to the OECD’s Multilateral Convention on Mutual Administrative Assistance will be urged to implement the future AEI standard as quickly as possible, he added.
Michael Sell of the German Finance Ministry concurred that there is no way now of halting AEI as the global standard, nor of withdrawing from it, despite the challenges that it poses in terms of implementation.
Sell nevertheless explained that resolving the past remains at the top of Germany’s political agenda, to ensure that German residents with undeclared foreign accounts are able to regularize their tax situation with the German tax authorities. While bilateral agreements offer one solution to the problem of legalizing untaxed assets, provisions granting client anonymity or partial tax exemption are unacceptable both politically and socially, Sell stressed.
Sell underlined his continued support for the voluntary tax declaration of non-compliance procedure available in Germany, which enables German residents to regularize their tax situation with the authorities, offering a “win-win” situation for both the tax man and taxpayers.
Although the voluntary declaration remains an “attractive” option, there is still a lack of awareness of the procedure among taxpayers in Germany, Sell noted. Many clients still avoid submitting a non-compliance declaration for fear of high back payments, he continued. There is then the real risk that the tax offence is discovered and that the individual is subsequently prosecuted, Sell said, pointing out that taxpayers may also face criminal prosecution for the submission of incomplete statements.
Bringing the conference to a close, Director of Liechtenstein’s Office of International Financial Affairs Katje Gey confirmed that Liechtenstein has been actively involved in the process of drawing up the OECD standard. At the same time, the Principality aims to pursue its policy of concluding bilateral tax agreements, aimed at preventing both double taxation and discrimination, she said.
Credit: Tax News