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UK Chancellor Alistair Darling chases rich in tax-free haven of Monaco
Chancellor tightens screw on wealthy Britons and their Riviera refuge
By Robert Watts and Nicola Smith, The Sunday Times, Times Online,
http://www.timesonline.co.uk, March 2, 2008
The United
Kingdom
chancellor is to step up hostilities against Britain’s super-rich by
pressing for sanctions against Monaco, the Mediterranean tax haven.
Under one proposal, to be discussed by Alistair Darling with European
finance ministers on Tuesday, there will be a levy on any money transferred
to a Monaco account from anywhere in Europe. Precise policies will be
discussed the following week at a meeting of Europe’s tax authorities in
Berlin.
The threat of sanctions marks an escalation in the battle between European
governments and the continent’s three remaining tax havens: Liechtenstein,
Andorra and Monaco.
“So far the attention has been on Liechtenstein, but Monaco is the
goldmine,” said a Whitehall official. “Germany has got the bit between its
teeth now and Monaco is where they want to go next – and we’re right with
them.”
Under Prince Albert II, Monaco has stuck to its zero income tax rate and
refusal to share data with the world’s tax authorities. The principality has
about 8,000 citizens, plus an expatriate community of at least 25,000.
Sir Stelios HajiIoannou, founder of easyJet, Tina Green, wife of the
retailing magnate Sir Philip Green, Wafic Said, the arms broker, and Sir
David and Sir Frederick Barclay, the proprietors of the Telegraph Media
Group, are among the British business grandees domiciled in Monaco.
Other high-profile names include Sir Roger Moore, the former James Bond
actor, Lord Laidlaw, the Tory peer, and Simon Reuben, the property
entrepreneur. There is no suggestion that any of these individuals have
illegally evaded tax by basing themselves in Monaco.
Hundreds of London hedge fund and private equity managers also live in
Monaco, which is just 1hr 40min from London’s City airport by private jet.
The government has also toughened rules that allow Britons to qualify as
nonresident even if they spend four working days a week in Britain. From
April businessmen commuting to Britain from Monaco will have to include the
day of travel as part of the 90 days a year they are allowed to spend in
Britain before they are obliged to pay UK income tax.
Meanwhile, HM Revenue & Customs (HMRC) expects to obtain £100m in unpaid tax
from 100 Britons who bank in Liechtenstein. It paid £100,000 to Heinrich
Kieber, a former bank employee, for clients’ names and bank account details.
In the past few days it has begun sending them letters referring to their
account numbers.
The European commission said this weekend that it is ready to prise open
Europe’s tax havens. “We are ready to cooperate. Nobody can solve this
bilaterally,” said a spokeswoman for Laszlo Kovacs, the EU taxation
commissioner.
Key to the commission strategy will be tightening loopholes left by a 2005
directive requiring member states automatically to share information with
each other on bank customers.
Austria, Luxembourg and Belgium refused to give up their right to banking
secrecy and the same exemption exists for Liechtenstein, Monaco, Andorra,
Switzerland and San Marino. EU officials now hope there will be enough
political pressure to push this entire bloc of countries towards sharing
their data.
Brussels has also set its sights on tax havens in Hong Kong, Singapore and
Macau.
HMRC said there were now three names, including Monaco, on a list of
uncooperative countries held by the intergovernmental body the Organisation
for Economic Cooperation and Development.
“The OECD is looking for an indication that the three states on the list
understand that they have to change their approach . . . banking secrecy
laws designed to shield money laundering and tax evasion from the
authorities are from a bygone era – they have no place in the modern world,”
a spokesman said.
Whistleblower now ‘most wanted’
Heinrich Kieber, who has made millions of euros by selling stolen bank
records to the world’s tax authorities, is now Liechtenstein’s “most wanted”
man.
Born in 1965 he has lived in Spain, New Zealand, the United States and South
Africa but returned to Liechtenstein in 1999 and found work digitalising the
records of the biggest bank, LGT, which he supplied to up to 11 tax
authorities.
Friends knew him as “Super Henry” and said he was talkative, easy-going and
fond of pubs.
It is thought Kieber has now fled to Australia where he is using one of at
least two identities given to him by German intelligence.
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