The Liechtenstein Tax Affair Finally makes it to India
May. 29, 2009
The Indian Tax Authority has send notices to more than 50 individuals who allegedly have accounts with the LGT Bank based in the tax haven of Liechtenstein, requesting information on the source of the money and also if it was taxed properly or not.
The list was provided to the Indian authorities by the German government, who bought the list of worldwide accountholders in LGT from a former employee. With this evidence the German government initiated the biggest national investigation on tax evasion ever, in 2008. So far these investigations have led to hundreds of investigation and search warrants in Germany alone. Since the German authorities shared the names of the supposedly 3,000 non-German account holders on the list with the respective governments, the investigations spread out to numerous other European countries and have now reached India.
According to the Economic Times the list of Indian account holders includes some well-know industrialists and a few small-time politicians but the majority of the names belong to not-so-prominent businessmen. The Indian government has now started to work intensively on retrieving black money stashed away in tax havens.
Given the recent developments, the air for Indians with secret offshore accounts will continue to get thinner. One tax haven after the other is giving-in to the pressure applied by large countries with high government spending and high tax levels. After places like Monaco and Andorra, Liechtenstein has also already agreed to tighten their banking laws and exchange information with the tax authorities of the account holders.
In any case, the Liechtenstein Affair is probably not finished for offshore account holders from India. Not only does the list contain more than 50 names but the German government also possess another list of offshore account holders in Liechtenstein. Acquired in a similar, if dubious, way and this time from the other main bank, the Liechtensteiner Landesbank. It is fair to assume Germany will pass on the names of interests to other governments again and that this would by no means be the last notice written by the Central Board of Direct Taxes.
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