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Inland Revenue yesterday confirmed it was working with a number of overseas tax authorities to investigate alleged tax rorts involving the use of bank accounts in the tiny European country of Liechtenstein.
International pressure on Liechtenstein to lift the cloak of secrecy from its banks intensified this week as tax agencies across the globe widened probes into tax evasion involving some of its banks, including LGT, which is owned by the state's billionaire royal family.
The US said it was examining more than 100 American taxpayers it suspected could be hiding money in the principality and was co-operating with tax administrators in seven other countries including New Zealand.
A spokesman for the IRD yesterday confirmed there were "less than a dozen" New Zealand taxpayers involved in the alleged tax dodges.
"We are aware that some offshore activities and investments of New Zealand taxpayers are operated on the assumption that Inland Revenue may not be able to obtain information from sources in other countries," Inland Revenue commissioner Robert Russell said yesterday. "These assumptions are no longer safe in today's environment of international co-operation."
The US Inland Revenue Service has examined Liechtenstein bank accounts that contain amounts of up to US$100 million.
The Inland Revenue spokesman said early stages of its audit process suggested the amount of New Zealand tax involved was $1-$2 million.
The quiet mountain enclave of just 35,000 residents tucked between Austria and Switzerland has lured funds from thousands of wealthy investors from around the globe, earning it an unwanted spot on an international blacklist of tax havens.
German prosecutors have been leading the Liechtenstein crackdown prompting 91 people to admit their role and pay up nearly ¬28 million ($51.5 million) in back taxes. The probe has already forced the resignation of one of Germany's best-known business figures - Deutsche Post chief executive Klaus Zumwinkel.
