Vienna - Austria will threatening to veto a tax cooperation deal due to be signed between Liechtenstein and the European Union, the finance ministry in Vienna said Monday. Along with Luxembourg, Austria is opposed to the deal with Liechtenstein - to be debated Tuesday among EU Finance Ministers - meant to help in the fight against tax evasion.
"The basic problem is that this agreement does not lead to greater transparency of anonymous investments," spokesman Harald Waiglein said.
Waiglein said the agreement between the tiny Alpine principality and the European bloc should not just cover bank accounts but also anonymous trusts and shell companies, or entities without significant assets that serve as vehicles for business.
Austria, Belgium and Luxembourg will have to further loosen their banking secrecy rules once the EU has concluded tax accords with Andorra, Liechtenstein, Monaco, San Marino and Switzerland, as a special deal with the bloc will then expire.
Austria's financial institutions would be at a competitive disadvantage if such agreements are not comprehensive enough, the spokesman in Vienna said.
Countries with banking secrecy laws came under heavy pressure earlier this year by several major economies, including Britain, France and Germany, to relax their confidentiality rules and open up for grater transparency, particularly in tax matters.
Liechtenstein, like neighboring Switzerland -both outside the EU - have been in the process of signing bilateral tax cooperation deals with other governments, in order to avoid sanctions by the G20 club and the Organization for Economic Cooperation and Development.
