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Last Updated: Tuesday, 4 March 2008, 12:33 GMT
Germany seeks tax haven clampdown
The Castel of Vaduz, Liechtenstein
Liechtenstein has said it is ready to work for a "reasonable compromise"
German finance minister Peer Steinbrueck is urging EU colleagues to back tighter rules to prevent taxpayers hiding their cash in tax havens.

Ministers were meeting in Brussels amid allegations of tax dodgers hiding their money in accounts in Liechtenstein.

Mr Steinbrueck told reporters that EU tax rules on sharing details should be changed "sooner than expected".

Liechtenstein, along with Austria and Belgium, was allowed exemptions from some of the rules introduced in 2005.

Although not an EU member, Liechtenstein has signed up to its savings tax directive. It has to charge foreign account holders a with-holding tax on interest income without the need to exchange information with EU countries.

Paid informant

The scandal surrounding Liechtenstein's foreign account holders began when German intelligence services paid an informant for a list of names.

Berlin claimed that hundreds of wealthy Germans were moving their money to the tiny Alpine state and evading taxes.

Map of Liechtenstein

For any change to take place, the EU's 27 member states will have to come to a unanimous agreement.

Austria is not keen on changing the rules because it wants to protect banking secrecy. But Belgian Finance Minister Didier Reynders accepts that changes are needed.

"When we review the system, Belgium will move directly to exchanging information," he said.

Mr Steinbrueck said member states had to support the European Commission's efforts to tighten the rules: "It cannot be that some European countries through their own agreements undermine the Commission negotiations."

In a newspaper interview at the weekend, Liechtenstein's Prime Minister Otmar Hasler said the tiny Alpine state was ready to work for a "reasonable compromise" on banking secrecy.

Liechtenstein in data theft probe
27 Feb 08 |  Business
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Q&A: Liechtenstein and tax evasion
25 Feb 08 |  Business
Country profile: Liechtenstein
23 Feb 08 |  Country profiles

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