Italy signs treaty with Liechtenstein to tackle tax evasion

ROME, Feb. 27 (Xinhua) — Italian Economy Minister Pier Carlo Padoan signed a treaty on Thursday with Liechtenstein Prime Minister and finance minister Adrian Hasler in Rome, a measure which abolishes bank secrecy.

The agreement, which helps identify potential tax evaders, was fundamentally the same as the one signed between Italy and Switzerland in the business capital of Milan earlier this week.

The move breaks the principle of client privacy that has permitted the creation of deposits used to dodge taxes, a statement from the Italian economy ministry said.

Thus, Liechtenstein and Switzerland will be taken off the black list of countries that oppose voluntary disclosure, Italian authorities will be able to ask information about hidden assets in the two countries, in line with the standards of the Organisation for Economic Development and Cooperation (OECD).

Under the new rules, citizens are able to come clean about their undeclared income on a voluntary basis.

According to a recent estimation of Italian authorities, tax evasion cost the Italian state more than 90 billion euros (about 101 billion U.S. dollars) every year between 2007 and 2012.