Dear Graduates, Professor Badelt, Professor Lang, Dear Guests,
I am especially pleased to be here at this important moment in your lives, dear Graduates, and to address a few remarks to you.
I would like to congratulate you warmly on your successful conclusion of the LL.M. programme in International Tax Law. By graduating, you have already achieved something extraordinary in a special and very dynamic field of expertise.
You come from all over the world and will soon go back out into all parts of the world.
Please allow therefore to ask you two rhetorical questions at the outset: What will you take with you from Vienna and the LL.M. programme in International Tax Law? And what role will you play as experts in international tax law?
My answer to the second question: You will in any event play a very important role. International tax law is the legal basis of globalisation of the economy in the 21st century. International tax law has become an important factor not only for cross-border financial service providers. Also for the smooth functioning of all internationally operating businesses, the new standards are determinative.
In the second part of my remarks, I will discuss these new standards in more detail.
What will you take with you from your time in Vienna? Along with an exciting course of studies, you will certainly take with you a special personal experience in a special place: Vienna is a historic point of intersection in European history.
The history of Liechtenstein is part of this intersection. The Principality of Liechtenstein is a constitutional hereditary monarchy. The acting Head of State is currently Prince Alois von und zu Liechtenstein. His family is one of the oldest noble families in Europe. And their ancestral home is Liechtenstein Castle near Maria Enzersdorf in Lower Austria at the edge of the Vienna Woods.
This builds the bridge in my remarks from Vienna to Vaduz, from the past to the present, and thus to the main subject of my speech. The question is: What role does Liechtenstein play in international tax law?
Allow me first to make a few brief comments about the general framework for international tax law. The three key terms in the new definition of this framework are "transparency", "standardisation", and "regulation". These three vectors indicate the basic direction of the change that no financial centre, no financial service provider, and no financial product will henceforth be able to ignore.
The new cross-border transparency does not only apply to the tax matters of natural and legal persons. In the course of the developments in the Eurozone, it is also becoming increasingly important for the financial conduct of entire States, at least in Europe.
Additionally, the density of regulation will increase for all financial service providers. Irrespective of whether we think this is a good thing or a bad thing: This is the tribute paid by the market for the crisis.
In other words: The clients of all financial centres in Europe but also in the United States are currently nervous to a certain extent. Times of transition and changes to framework conditions have always occurred throughout history. But the high speed of change right now can certainly be called historic. A calm river has turned into a rushing torrent.
Liechtenstein reacted to these changes already more than a year ago. The Liechtenstein Declaration of 12 March 2009 laid the cornerstone for the renewal of the financial centre. The Liechtenstein Declaration is its new charter. A charter applies to everyone. It applies to all players in the Liechtenstein financial centre.
- In the Declaration, Liechtenstein commits itself to the global OECD standard on transparency and information exchange in tax matters.
-We offer interested States the option of concluding bilateral tax agreements to cooperate effectively in tax matters.
-Liechtenstein wants to ensure legal certainty and conformity while preserving privacy and bank client confidentiality.
-And in this way, we live up to our responsibility toward the clients of the financial centre and the justified tax claims of our treaty partners.
The new treaty policy of the Government builds on this charter and the principles set out therein. By way of an entirely new network of bilateral tax information and double taxation treaties, we want to create forward-looking, fail-safe framework conditions for all domestic and foreign service providers.
The Liechtenstein Declaration is supported by the Head of State and by all political parties and business associations in the country. With this Declaration, we have defined, publically formulated, and internationally communicated our benchmarks for the financial centre and especially for Liechtenstein's international tax policy. The goal of our efforts is to preserve and expand legal certainty and legal compliance – also with respect to tax matters – for the clients of our financial centre.
In the second part of my remarks, allow me to discuss in more detail the circumstances in the Liechtenstein financial centre.
Our strategy for preserving and strengthening the competitiveness of the Liechtenstein business location rests on three pillars: first, international tax cooperation; second, innovative and competitive national tax legislation; and third, outstanding quality of services in the private and public sectors.
With regard to tax cooperation:
We offer all interested partner States the option to conclude bilateral agreements for effective cooperation in tax matters. Various countries have already taken us up on our offer.
With the United States, we concluded a tax information exchange agreement the end of 2008. Especially with the United Kingdom and Germany, we concluded two agreements of particular importance to the financial centre last years. These agreements are the concrete implementation, further development, and refinement of the OECD standard.
In addition to the United States, our treaty strategy has focused primarily on our partners in Europe, the EU, but also the OECD and the G-20. Also in future, we will base our priorities on economic, political and strategic considerations.
At the same time, however, we will also conduct and conclude negotiations on tax agreements with other countries in all regions of the world, also with smaller jurisdictions expressing interest – agreements that incorporate innovative and future developments especially relating to financial industry products. The recently signed agreement with Hong Kong is one example of this.
I would especially like to emphasise the tailor-made tax agreement with the United Kingdom we signed in Vaduz in mid-August 2009. Until 2015, it offers preferential terms for voluntary disclosure of non-tax-compliant income and assets of UK taxpayers.
The agreement creates legal certainty for UK clients and for Liechtenstein financial intermediaries, and its special taxpayer assistance and compliance programme contributes to fulfilment of justified tax claims by the United Kingdom. Most importantly, however, the agreement also makes a new element possible: namely the differentiation and separation of tax secrecy and bank client confidentiality that we have clearly defined for the first time in this agreement.
The complexity of implementing international standards relating to cross-border tax cooperation in real life can be seen in the bilateral negotiations between the European Union and Liechtenstein on an anti-fraud agreement. The time-consuming and complicated discussions now no longer take place between Brussels and Vaduz, but rather primarily among the capitals of the 27 EU member States.
Their continuing disagreement makes at least one thing clear: international and supranational tax cooperation is not merely a country-specific matter. No, it may meanwhile also touch national tax sovereignty and thus the core of the political sovereignty of individual States. Redefining it is a long process with potentially historic dimensions for Europe and thus also for Switzerland and Liechtenstein.
But let's return to the sober present and take another look at the newly defined tax strategy of the EEA member State of Liechtenstein. The ultimate goal for us in negotiating tax information agreements is to conclude double taxation agreements. Such agreements would strengthen the competitiveness of our service providers and enterprises and would promote discrimination-free business opportunities in open markets.
With regard to Liechtenstein tax law:
For non-discrimination to become a reality, however, and to prepare Liechtenstein adequately for this competition, the second pillar of our tax strategy is enormously important: namely reforming our national tax law in order to put our country back on top in the field of tax competition.
Ladies and Gentlemen,
I am firmly convinced that the current financial and economic crisis shows one thing, namely that rapid and good solutions in the field of national taxes are absolutely necessary. In this spirit, I am convinced that the national tax systems will undergo serious tests over the coming years. The case of Greece demonstrates the relevance of this question with utter clarity.
For precisely that reason, the Liechtenstein Government has very carefully initiated a comprehensive tax reform. The Liechtenstein Parliament has already considered the totally revised Tax Act in a first reading. The new Tax Act will be compatible with international standards – especially by eliminating ring-fencing – and with European law. Key phrases in this regard are: preserving fundamental freedoms, and complying with the provisions on State aid.
With this new Tax Act, we want to become an important partner in international tax planning and offer the best possible conditions for both existing and new enterprises.
The tax reform also envisages abolition of the "special company taxes" for domiciliary companies. This special type of tax entails the risk of violating the EEA Agreement with respect to State aid.
Instead, we are proposing a private assets structure, which will allow for taxation of asset management companies that is both attractive and compatible with European law. This means Liechtenstein will be strengthened as an attractive location for asset management.
With regard to the quality of services:
The same goal is served by the third pillar of our tax strategy, which is: "outstanding services in the private and public sector". Meeting this demand is likewise crucial for success in the international competition among locations.
The State must ensure that its own services function smoothly. This is especially also true in the field of taxation. For this reason, the people working on tax matters in the Administration must have expansive knowledge and experience. They must have good training, be able to provide answers quickly – also on complex fact patterns – and be specialised in specific areas of expertise. The practice of the tax authorities must be transparent and thus predictable and reliable, so that tax planning is made possible.
With this, I would like to conclude my remarks on the most recent developments in Liechtenstein tax law. The insights I provided are multi-faceted. They have also shown you how exciting and diverse your future professional possibilities can be in practice.
In this spirit, I wish you much success for your future career path and all the best for the future.
Thank you very much for your attention.
Dr. Klaus Tschütscher
Prime Minister
Quelle: Portal of the Principality of Liechtenstein, Press Releases
Link: www.liechtenstein.li |
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