Wednesday, November 02, 2011

How good is Liechtenstein's 'technical expertise' ?

A knowledgeable person sent us this email, which rather speaks for itself:
Do you remember earlier this month, Liechtenstein expressed its desire to expeditiously replicate a Swiss-Germany style tax agreement? [TJN: see our analysis of the almost identical UK-Swiss tax deal here.]

We know Rubik doesn't affect foundations, trusts and establishments [as a private sector UK practitioner recently admitted: "Tax Justice Network (TJN) has produced a study of the UK-Swiss Tax Agreement which does show some very large holes in the agreement."], so this type of deal is a sham designed to give Liechtenstein an aura of compliance and cooperation.

However, the one and only benefit the tax haven gets in return for doing such an agreement is easier access to an EU Member State's market.

Then why did LGT just sell its German onshore subsidiary to ABN Amro?

Obviously Liechtenstein doesn't give a hoot about "easier access to onshore markets".

LGT's short-term experiment to go onshore failed miserably. These offshore banks think they fool the public when they state in the press that the reason people open accounts with them is due to their unparalleled technical expertise, stability of management and superb market knowledge... yet when they go onshore, they crap out. Clearly, the only reason people invest with them is tax avoidance. (Note Julius Baer, et al, setting up in tax havens yet closing down their onshore presence, eg USA.)

So LGT selling its German subsidiary and then Liechtenstein (Princely House owns LGT, so LGT = Liechtenstein) declaring it wants a Rubik agreement is obviously a sham to get respectability when it knows none of its offshore German-resident clients will be impacted."
It is a very reasonable point to make. Follows similar things we've said before.

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