Prosecutors in the US have made an approach to Liechtenstein’s finance firms to handover statistical data on their wealthy American clients.
The firms, known as fiduciaries, have been told this is an informal request but one which could lead to formal tax probe.
The move has been revealed by Swiss newspapers and it is a new front into a long running investigation by US tax authorities into foreign banks and financial companies who help American taxpayers hide their assets.
The demand is for Liechtenstein’s foundations and financial companies to give details of how many Americans have financial links with the small country.
Liechtenstein has similar secrecy laws to its neighbour Switzerland and has established itself as one of the world’s leading offshore tax havens.
Leaked data
The principality has done this by allowing secretive trusts and foundations, known as fiduciaries, to prosper.
This won’t be the first time that Liechtenstein has found itself in the spotlight for revealing the tax affairs of people hiding assets within their borders.
In 2008, leaked data revealed that hundreds of wealthy Germans were hiding assets to mitigate their tax bills and the Liechtenstein authorities were compelled to investigate.
The latest move by the US comes after a recent tax amnesty in which Americans came forward to reveal how they managed to hide undeclared funds.
That led to an investigation into the Swiss banking system and hefty fines for a number of banks who willingly broke laws and tax agreements on behalf of their clients.
Bank fined
Among the banks being fined was Switzerland’s oldest, Wegelin and Co, which was hit with the £38 million charge. The bank subsequently closed.
Details of the latest request are scarce but it is believed that the American authorities are asking for statistical data going back to 2008 and it is up to the fiduciaries to decide for themselves whether they want to cooperate or not.
The move follows an agreement between Liechtenstein and HM Revenue and Customs (HMRC) for British taxpayers to reveal details of their assets without incurring heavy fines or criminal prosecution.
Known as the Liechtenstein Disclosure Facility, it allows a UK taxpayer to make a full disclosure of their assets going back to 1999 and settle their tax bill with HMRC.
Anyone using the LDF will incur a 10% fixed penalty and an assurance they will not be prosecuted.
However, for non-prosecution the person using LDF will need to make a full and accurate disclosure and confirm that their assets have not come from criminal activity.
The LDF also brings an obligation for the financial intermediary in Liechtenstein to be proactive in contacting their clients if they consider a disclosure should be made.
