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The Exchange of Tax Information Portal is an initiative of the Global Forum on Transparency and Exchange of Information for Tax Purposes. The Global Forum conducts peer reviews of its member jurisdictions' ability to co-operate with other tax administrations in accordance with the internationally agreed standard. The standard provides for exchange of information on request where it is foreseeably relevant to the administration and enforcement of the domestic tax laws of the requesting jurisdiction. Effective exchange of information requires that jurisdictions ensure information is available, that it can be obtained by the tax authorities and that there are mechanisms in place allowing for the exchange of that information. The Global Forum's peer review process examines both the legal and regulatory aspects of exchange (Phase 1 reviews) and the exchange of information in practice (Phase 2). The EOI Portal will track the development of these peer reviews, including changes that jurisdictions make in response to the Global Forum's recommendations.

Peer Review: Liechtenstein Phase 2 report

This report for Liechtenstein has been published on 30 Oct 2015. You can buy this report, or browse it online below.

Skip directly to the Executive Summary. You may also want to view the tables of determinations and ratings.


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Determinations and Recommendations

Jurisdictions should ensure that ownership and identity information for all relevant entities and arrangements is available to their competent authorities. (ToR A.1)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   Information regarding the ownership of foreign companies that are resident for tax purposes in Liechtenstein may, under certain circumstances, not be available.  Liechtenstein should ensure that identity information on the owners of foreign companies that are resident for tax purposes in Liechtenstein is available to its competent authority. 
Information on beneficiaries with less than a 25% interest in trusts and trust enterprises is not required to be maintained.  Liechtenstein should ensure that information is maintained on all beneficiaries and settlor of trusts and trust enterprises.  
Phase 2 Rating Factors Recommendations
Largely Compliant.  Liechtenstein recently introduced new rules, namely rules providing for identification of holders of bearer shares and provisions on oversight and enforcement of obligations to maintain registers of shareholders (including register of bearer shares), which should improve availability of ownership information in Liechtenstein. However these rules are not yet sufficiently tested in practice.   Liechtenstein should monitor implementation of the newly introduced rules and take measures to address any identified deficiencies. 
   
Jurisdictions should ensure that reliable accounting records are kept for all relevant entities and arrangements. (ToR A.2)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Largely Compliant.  Obligations ensuring that all relevant entities and arrangements are required to maintain accounting information in line with the standard apply to financial years beginning after 31 December 2013 and therefore remain to be sufficiently tested.  Liechtenstein should monitor availability of accounting information pursuant to the newly introduced rules so that all relevant entities and especially trusts, foundations and anstalts covered by PAS regime maintain accounting records including underlying documentation in line with the standard. 
Banking information should be available for all account-holders. (ToR A.3)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.  Although opening of bearer passbooks was prohibited in 2001, some pre-existing passbooks are still in existence and identity information on their holders is not available unless a transaction takes place.  Liechtenstein should strengthen the implementation of its measures to ensure that information on the holders of bearer passbooks is available to its competent authority. 
Competent authorities should have the power to obtain and provide information that is the subject of a request under an exchange of information arrangement from any person within their territorial jurisdiction who is in possession or control of such information (irrespective of any legal obligation on such person to maintain the secrecy of the information). (ToR B.1)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the requested jurisdiction should be compatible with effective exchange of information. (ToR B.2)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Largely Compliant.  During the period under review, Liechtenstein was asked to provide exceptions from notification. In one case the EOI partner withdrew the request. Liechtenstein introduced exceptions to the prior notification procedure in August 2015. However, considering the short period between the introduction of the exceptions, after the end of the period under review and just before the cut-off date, the application of the exceptions could not be assessed.  Liechtenstein should monitor application of the exceptions to the prior notification procedure in practice to ensure that it is applied in accordance with the standard. 
Exchange of information mechanisms should provide for effective exchange of information. (ToR C.1)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Partially Compliant.  Liechtenstein applies a restrictive interpretation of the foreseeable relevant standard when asked for ownership and identity information of foundations and other entities. Furthermore, while assessing the relevance of the information obtained from information holders, Liechtenstein has applied a restrictive interpretation of its relevance to requests. This has restricted the exchange of information in a number of cases during the review period.  Liechtenstein should correct its interpretation of the foreseeably relevant standard to ensure that it does not impede the effective exchange of information. 
The jurisdictions' network of information exchange mechanisms should cover all relevant partners. (ToR C.2)
Determination Factors Recommendations
The element is in place.     Liechtenstein should continue to develop its EOI network with all relevant partners. 
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdictions' mechanisms for exchange of information should have adequate provisions to ensure the confidentiality of information received. (ToR C.3)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Largely Compliant.  The disclosure during the period under review to third parties or taxpayers of details that were not necessary for gathering the requested information, including the request letter itself, is not in accordance with the principle that information contained in an EOI request should be kept confidential. Liechtenstein amended its Act on Administrative Assistance in Tax Matters, which amongst other changes limits access to entitled parties to examine relevant extracts from an EOI request. Although Liechtenstein states that it already changed its practice in 2013, it should be noted that the amendment is very recent (August 2015) and so it remains to be seen whether this will operate in practice in conformity with the confidentiality requirements of the international standard.  Liechtenstein should monitor the practical application of the recent amendment of its law to ensure that it does not exceed the confidentiality requirements as provided for under the international standard. 
The exchange of information mechanisms should respect the rights and safeguards of taxpayers and third parties. (ToR C.4)
Determination Factors Recommendations
The element is in place.   The absence of exceptions to the requirement in the TIEAs with Andorra and Antigua and Barbuda to notify taxpayers has the potential to prevent or delay the exchange of information by Liechtenstein.  It is recommended that the TIEAs with Andorra and Antigua and Barbuda be updated to allow exceptions to the requirement to notify taxpayers. 
Phase 2 Rating Factors Recommendations
Partially Compliant.  Liechtenstein’s approach regarding the application of the concept of ordre public has had a significant impact on EOI in practice.  Liechtenstein should modify its law and/or practice as appropriate to ensure that it can give effect to the obligations under its EOI mechanisms.  
The jurisdiction should provide information under its network of agreements in a timely manner. (ToR C.5)
Determination Factors Recommendations
The assessment team is not in a position to evaluate whether this element is in place, as it involves issues of practice that are dealt with in the Phase 2 review.      
Phase 2 Rating Factors Recommendations
Largely Compliant.  Although Liechtenstein’s processes and resources are generally in place to ensure effective exchange of information, certain areas - mainly related to establishment and monitoring of deadlines and the workload of the EOI Unit - should be improved.   Liechtenstein should endeavour to improve its resources and streamline its processes for handling EOI requests to ensure that all EOI requests are responded to in a timely manner.