The growing tension between Liechtenstein and Germany over tax evasion has highlighted the difficulty large countries have in keeping wealthy people from parking money in tax havens provided by smaller states and territories.

The Organisation for Economic Co-operation and Development said the disclosure about alleged tax evasion by German citizens through trusts based in Liechtenstein “highlights a much broader challenge in today’s globalised economy: how to respond to countries and territories that seek to profit from tax dodging by residents of other jurisdictions”.