Monaco vows to help German tax probe

Germany on Wednesday said Monaco had pledged to improve co-operation with Berlin in fighting tax fraud, money laundering and ­corruption.

A German government spokesman said Prince Albert of Monaco, who was on Wednesday night meeting Angela Merkel, chancellor, had agreed to start negotiations on a bilateral agreement between the two countries’ tax authorities and that talks were under way.

Such an agreement could go some way towards removing the small principality from the Organisation for Economic Development and Co-operation’s blacklist of “unco-operative states” in tax matters.

Liechtenstein, Andorra and Monaco are the only European states on the list of countries whose low taxes and strict bank secrecy are seen by the OECD as encouraging tax evasion in neighbouring countries.

Monaco’s embassy in Berlin did not return calls for comment, but the German government spokesman said “our understanding is that such an agreement would include tax evasion”.

With a population of 33,000, Monaco is home to 40 banks with more than 300,000 accounts and assets totalling €60bn ($91bn, £46bn). If confirmed, a move by Monaco to start exchanging information with Germany on suspected tax evaders would put it on par with Switzerland and increase the isolation of Liechtenstein.

The Alpine principality is locked in a dispute with ­Berlin over its strict bank secrecy. Although the two countries co-operate on fighting corruption, money laundering and organised crime, Liechtenstein refuses to provide the German authorities with any legal assistance in fighting tax evasion.

A spokesman for Peer Steinbrück said the German finance minister would address the issue of tax evasion at a meeting with his European Union counterparts on Tuesday.

Greece on Wednesday became the latest country to say it would approach Germany for information on possible tax evaders with accounts at Liechtenstein’s LGT bank.

Germany, now in the midst of its largest crackdown on tax evaders at home, has offered other countries access to a list of 800 accounts held by non-German taxpayers at the bank. The list is part of documents acquired by the German intelligence service from a former LGT employee last year.

“We will make use of all kinds of information to fight tax evasion, including information from other countries,” said George Alogos-koufis, Greek finance minister. Athens is stepping up measures against tax dodging in order to boost flagging ­revenues.

Greek residents are believed to hold more than €25bn in offshore accounts, mainly in Europe. A tax amnesty three years ago aimed at encouraging tax evaders to repatriate funds proved unsuccessful.

Paul Walsh, head of offshore assets investigations at the Irish Revenue Commissioners, told the RTÉ radio station that his authority would approach Germany “in a matter of days” to seek information on Irish residents who might have money in Liechtenstein.

The Czech Republic, Spain, Italy and Finland also confirmed investigations into possible tax evaders who might have used Liechtenstein bank accounts, joining nations including the US, UK and Australia that are already involved in the worldwide investigation.

Of the 15 countries so far planning inquiries, 10 are in the EU.

The US said it was investigating more than 100 citizens suspected of using the principality to hide wealth.

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