A landmark German assault on tax dodgers who allegedly stash cash in Liechtenstein overlooks domestic failings and practices by neighbors like Luxembourg and Switzerland, tax experts say.
The finance ministry threatened last week to tax all financial transfers to Liechtenstein unless the Alpine nation relaxed its banking secrecy codes and helped track Germans targeted in a massive tax fraud probe.
But a foreign lawyer who works in Germany called the threat "ridiculous."
"The only way this proposal works is to organize an international boycott against Liechtenstein," said the tax expert, who asked to remain anonymous.
And "civil and tax laws of modern nation-states are simply too complex -- and too frequently in flux -- to make rigorous international cooperation anything other than a pipe dream," he said.
Finance Minister Peer Steinbrueck was quoted yesterday by the Bild am Sonntag newspaper as saying that Germany sought a new tax agreement with Liechtenstein, warning that Berlin was mulling "the possibility of significantly complicating business transactions" with the principality.
The finance ministry suspects wealthy Germans of hiding up to 4 billion euros (US$6 billion) in Liechtenstein trusts, depriving Berlin of hundreds of millions of euros in tax revenues.
Meanwhile, the Organization for Economic Cooperation and Development (OECD), which has placed Liechtenstein on a list of "uncooperative tax havens," urges governments to reach out to taxpayers as officials clamp down on fraud.
The OECD advises countries "to try to make their tax systems as simple as possible so that taxpayers who want to comply are able to comply easily," said Grace Perez-Navarro, deputy director of the body's center for tax policy and administration.
She said that people "are not always fully aware of where the line is between legal and illegal."
A previous German campaign managed to diminish flows of funds to Luxembourg, along with pressure from the EU, but international tax specialist Francois Hellio said loopholes still exist.
Luxembourg ditched a 1929 tax-free holding company statute, "but it recently created an inheritance holding scheme that resembles the previous one," said Hellio, a partner at CMS Bureau Francis Lefebvre, outside Paris.
Austria, Belgium, Luxembourg and Switzerland have also resisted disclosing the identity of foreign account holders.
They compromised by agreeing to an EU withholding tax, which the foreign lawyer said was "sometimes referred to as the `tax on the stupid' because it is so easy to avoid."
German professor and tax specialist Lorenz Jarass said the German push on Liechtenstein was "peanuts" and that Berlin was sending a message to Bern.
"Germany will do all it can to snare a Swiss bank," he said.
Meanwhile, because the means of money transfers are so quick, the foreign lawyer said Germany "was reduced to picking the pockets of those who can't move.
"They tax labor and they tax consumption, those are the primary sources of revenues," he said.
LIMITS: While China increases military pressure on Taiwan and expands its use of cognitive warfare, it is unwilling to target tech supply chains, the report said US and Taiwan military officials have warned that the Chinese People’s Liberation Army (PLA) could implement a blockade within “a matter of hours” and need only “minimal conversion time” prior to an attack on Taiwan, a report released on Tuesday by the US Senate’s China Economic and Security Review Commission said. “While there is no indication that China is planning an imminent attack, the United States and its allies and partners can no longer assume that a Taiwan contingency is a distant possibility for which they would have ample time to prepare,” it said. The commission made the comments in its annual
DETERMINATION: Beijing’s actions toward Tokyo have drawn international attention, but would likely bolster regional coordination and defense networks, the report said Japanese Prime Minister Sanae Takaichi’s administration is likely to prioritize security reforms and deterrence in the face of recent “hybrid” threats from China, the National Security Bureau (NSB) said. The bureau made the assessment in a written report to the Legislative Yuan ahead of an oral report and questions-and-answers session at the legislature’s Foreign Affairs and National Defense Committee tomorrow. The key points of Japan’s security reforms would be to reinforce security cooperation with the US, including enhancing defense deployment in the first island chain, pushing forward the integrated command and operations of the Japan Self-Defense Forces and US Forces Japan, as
IN THE NATIONAL INTEREST: Deputy Minister of Foreign Affairs Francois Wu said the strengthening of military facilities would help to maintain security in the Taiwan Strait Japanese Minister of Defense Shinjiro Koizumi, visiting a military base close to Taiwan, said plans to deploy missiles to the post would move forward as tensions smolder between Tokyo and Beijing. “The deployment can help lower the chance of an armed attack on our country,” Koizumi told reporters on Sunday as he wrapped up his first trip to the base on the southern Japanese island of Yonaguni. “The view that it will heighten regional tensions is not accurate.” Former Japanese minister of defense Gen Nakatani in January said that Tokyo wanted to base Type 03 Chu-SAM missiles on Yonaguni, but little progress
NO CHANGES: A Japanese spokesperson said that Tokyo remains consistent and open for dialogue, while Beijing has canceled diplomatic engagements A Japanese official blasted China’s claims that Japanese Prime Minister Sanae Takaichi has altered Japan’s position on a Taiwan crisis as “entirely baseless,” calling for more dialogue to stop ties between Asia’s top economies from spiraling. China vowed to take resolute self-defense against Japan if it “dared to intervene militarily in the Taiwan Strait” in a letter delivered Friday to the UN. “I’m aware of this letter,” said Maki Kobayashi, a senior Japanese government spokeswoman. “The claim our country has altered its position is entirely baseless,” she said on the sidelines of the G20 summit in Johannesburg on Saturday. The Chinese Ministry
RSS