In a continuing and overpowering war against low-tax jurisdictions (link), German government hit out a tax attack on the Principality of Liechtenstein (link) by sending intelligence spies into Liechtenstein and bribing former bank employee to alledgly obtation bank client data. Angela Merkel, Germany's chancellor, has endorsed threats to isolate Liechtenstein if the latter does not ease bank secrecy rules (link).
Liechtenstein's GDP per capita equals 84,300 € ($125,000) per capita, which is about three times higher than Germany's GDP per capita. Principality's banking legislation is based on financial privacy. German government has continually forced Liechtenstein to sign information-sharing agreements that would enable German tax authorities to tax capital income of German entrepreneurs whose company is headquartered from Liechtenstein. Also, information-sharing agreements might impose sanctions and tax prosecution of German companies situated in Liechtenstein. The aggression on behalf of German government indisputably violates territorial sovereignity and financial privacy. Nevertheless, the latter is one of the most fundemental human rights.
2 comments:
The quoted GDP per capita for Liechtenstein departs significantly from other sources I was able to find. The CIA factbook quotes $25,000 per capita in 1999 (the USD was then near its highest). This site quotes $50,000 per capita in 1998 - they must have arrived at this figure by using a more recent exchange rate.
However, I cannot envision how these figures could be massaged into EUR 84,300 today. Has Liechtenstein been experiencing 10% annual growth? While not impossible, sounds doubtful.
Usually it is quite difficult to obtain economic data about Liechtenstein. CIA's data on GDP per capita is back from 1999 and almost 10 years have passed since that time. I'll take a closer look at it. Meanwhile, the data has been taken from the most recent article in Financial Times:
"Liechtenstein’s banks have turned half a valley of land, wedged between the upper Rhine and an Alpine precipice, into one of the continent’s richest nations. The EU lists 2005 gross domestic product at €84,300 (£63,600, $125,000) per person, about three times that of Germany."
http://www.ft.com/cms/s/0/dd57d7c2-e0b2-11dc-b0d7-0000779fd2ac.html
Of course this is not impossible. And it is doubtful nevertheless. It depends which calculation method has been considered. Basic GDP equation is:
Q = G + C + I + (EX - IM) = I + C + G + NX
GDP = Government + Consumption + Investment + Net export
Liechtenstein's national income accounts should be taken under a detailed consideration to see where is it per capita GDP really coming from.
Regards,
Rocks
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