Posted by: Dirk | February 24, 2008

European tax havens and the IRS

The ongoing investigations into tax evading of Germans has brought the topic to the top of the political agenda. Threats have been thrown around, and tiny Liechtenstein got more attention than it wants. However, they probably will have to face defeat. The same issue, tax evasion, came up in 2003 with the US. The Internal Revenue Service (IRS) wanted to have the data of US citizens’ bank accounts at Swiss banks. These referred to their Bankgeheimnis, a cultural institution comparable only to Germany’s Reinheitsgebot. The US then enacted a law stating that all banks active in the US have to disclose their US clients data to the IRS. This worked out the way the US hoped, end of story.

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