Australian and New Zealand tax authorities on Wednesday mounted raids and audits on rich residents suspected of dodging tax through Liechtenstein bank accounts as a international investigation widened to the Pacific.
Australia's Prime Minister Kevin Rudd said while investigations were still underway, tax cheats would not be tolerated and a crackdown on the use of secretive tax havens would be "bottom-line" business for his centre-left government. "The tax laws of the country are there to be adhered to," Rudd told journalists after meeting his New Zealand counterpart Helen Clark in Canberra.
International pressure on Liechtenstein to lift the cloak of secrecy from its banks is growing as tax agencies across the globe widen probes into tax evasion involving accounts in the tiny European state.
After Britain and the Netherlands joined Germany in probing secret bank accounts in the landlocked tax haven, the United States said it was investigating more than 100 American taxpayers suspected of using the principality to hide their wealth.
The tiny country of 35,000 residents nestled between Austria and Switzerland has lured thousands of wealthy investors from across the world with a promise of confidentiality, placing it on an international blacklist of taxation havens.
Australian Taxation Office Commissioner Michael D'Ascenzo said the ATO had carried out raids and issued taxation notices to 20 Australian clients of LGT Group, which is a Liechtenstein bank owned by the principality's billionaire ruling family.
"These are ongoing inquiries and the final tax bill is still unclear," D'Ascenzo said, calling for tax avoiders to reveal themselves to avoid harsh penalties coming from any audit.
Amounts under investigation, he said, ranged from A$200,000 ($187,000) to millions of dollars, describing Liechtenstein's banking system as "opaque". ATO has estimated A$5 billion leaves Australia each year for tax haven nations.
New Zealand's Inland Revenue Department said it had identified less than a dozen people using Liechtenstein, but the amount of tax involved was under NZ$2 million ($1.6 million).
Authorities in Australia and New Zealand have also been keeping an eye on several Pacific nations, including Nauru, the Cook Islands, Samoa and Vanuatu, which have previously drawn the attention of international tax investigators.
But all of the Pacific nations have been taken off a 2002 blacklist of uncooperative tax haven nations after promising the Organisation for Economic Co-operation and Development that they would improve transparency. Australia ruled out working with German authorities, and officials said the Australian probe pre-dated investigations in Europe opened by secret tax data obtained by Germany's government.
Germany paid for information that led to a probe into large-scale tax evasion linked to Liechtenstein which has forced out the head of Deutsche Post. D'Ascenzo said international investigations now underway stemmed in part from an OECD meeting of 30 countries in South Korea in 2006 which warned of the growing use of tax havens.
German prosecutors, who have been leading the crackdown, widened their investigation on Tuesday to a second, unnamed bank in Liechtenstein. As a result of the German investigation, 91 people have already admitted their role and coughed up nearly 28 million euros ($41.5 million) toward their back taxes. Another 72 people had turned themselves in to tax authorities.
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