Global Forum on Transparency and Exchange of Information for Tax Purposes Peer Reviews:
Phase 2: Implementation of the Standard in Practice
This report contains the 2014 “Phase 2: Implementation of the Standards in Practice”
Global Forum review of Liechtenstein.
The Global Forum on Transparency and Exchange of Information for Tax Purposes is the
multilateral framework within which work in the area of tax transparency and exchange
of information is carried out by over 120 jurisdictions which participate in the work
of the Global Forum on an equal footing.
The Global Forum is charged with in-depth monitoring and peer review of the implementation
of the standards of transparency and exchange of information for tax purposes. These
standards are primarily reflected in the 2002 OECD Model Agreement on Exchange of
Information on Tax Matters and its commentary, and in Article 26 of the OECD Model
Tax Convention on Income and on Capital and its commentary as updated in 2004, which
has been incorporated in the UN Model Tax Convention.
The standards provide for international exchange on request of foreseeably relevant
information for the administration or enforcement of the domestic tax laws of a requesting
party. “Fishing expeditions” are not authorised, but all foreseeably relevant information
must be provided, including bank information and information held by fiduciaries,
regardless of the existence of a domestic tax interest or the application of a dual
All members of the Global Forum, as well as jurisdictions identified by the Global
Forum as relevant to its work, are being reviewed. This process is undertaken in two
phases. Phase 1 reviews assess the quality of a jurisdiction’s legal and regulatory
framework for the exchange of information, while Phase 2 reviews look at the practical
implementation of that framework. Some Global Forum members are undergoing combined
– Phase 1 plus Phase 2 – reviews. The ultimate goal is to help jurisdictions to effectively
implement the international standards of transparency and exchange of information
for tax purposes.
Published on October 30, 2015
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The Phase 2 review rates Liechtenstein overall as largely compliant with the international standard. Liechtenstein’s legal framework generally ensures that ownership information, accounting and bank information is available and can be obtained in line with the standard. The report acknowledges measures taken by Liechtenstein since the Phase 1 review to further improve transparency and availability of information for exchange of information purposes.
The main findings of the report relate to application of the foreseeable relevance criteria and of the concept of ordre public. The report notes that in practice Liechtenstein applied a restrictive interpretation of the standard of foreseeable relevance in a number of cases and recommends Liechtenstein to correct this interpretation to ensure that it does not impede effective exchange of information. The report further notes that Liechtenstein’s application of the concept of ordre public in respect of stolen data has had a significant impact on exchange of information in practice resulting in a considerable number of received requests currently pending. The report recommends Liechtenstein to take measures to address this so that it can give full effect to the obligations under its EOI mechanisms.
Although there are certain areas for improvement to ensure that all EOI requests are responded to in a timely manner Liechtenstein has in place appropriate organisational processes and resources to ensure effective exchange of information.
Liechtenstein should report steps taken to address the recommendations made in the report within one year. For further information on Liechtenstein’s exchange of information practices and to read the full report click here.