Liechtenstein has deposited its instrument of ratification for OECD’s Convention on Mutual Administrative Assistance in Tax Matters.
Under the terms of the convention, the country will now implement the standard for automatic exchange of financial account information in tax matters, which was developed by the OECD and G20 countries in 2014.
The standard requires jurisdictions to obtain information from their financial institutions and automatically share the data with other jurisdictions on an annual basis.
The convention also mandates Liechtenstein to implement automatic exchange of country-by-country reports under the base erosion and profit shifting (BEPS) norms pioneered by OECD/G20.
The aim of the BEPS project is to close gaps in international tax rules that allow multinational enterprises to artificially shift profits to low or no-tax jurisdictions.
The convention will be effective for Liechtenstein on 1 December 2016, with automatic exchange of financial account information to start from 2017.