Last modified: 08/07/2023 12:48

Corporate taxation

	Rate
Corporate income tax rate	12.5
Branch tax rate	12.5
Capital gains tax rate	In most cases not applicable

Residence: An entity is resident if its legal seat or place of effective management is in Liechtenstein

Basis: See below

Taxable income: Resident companies are subject to corporate income tax on worldwide income with the exception of income from a permanent establishment and immovable property located abroad

Significant local taxes on income: See above

Alternative minimum tax: A minimum corporate income tax is levied in the amount of CHF 1’800. However, small commercial entities are not subject to the minimum corporate tax

Taxation of dividends: The most important type of exempt income is dividend income. However, dividends derived from holdings are not exempt provided – the holding amounts to at least 25% of the voting rights – more than 50% of the total earnings from the foreign legal person making the payment sustainable, consist of passive income

Capital gains: Capital gains on domestic immovable property are exempt from income tax, but are subject to real estate capital gains. In additions, capital gains from the sale of shares are, in general, exempt, depending on the type of income (passive/active)

Losses: Ordinary losses may be carried forward for an unlimited period, but losses may only be used to set off up to 70% of taxable income. Capital losses on holdings, whether realized or unrealized, are not tax deductible.

Foreign tax relief: In most cases, double taxation of income is avoided by the exemption method. But in general tax treaties apply.

Participation exemption: Not applicable

Holding-company regime: There is no CFC legislation

Tax-based incentives: Private asset structures (Private Vermögensstruktur/Private Asset Structure PVS) are legal entities not carrying out any economic activities and that only acquire, hold, administer and sell financial instruments and participations in other entities holding cash and bank accounts. Shares of PVS cannot be publicly traded. Private asset structure are subject to tge minimum corporate income tax of presently CHF 1’800 and are not subject to assessment.

Group relief/fiscal unity: Associated legal entities may form a group of companies if a parent is resident in Liechtenstein and holds directly or indirectly more than 50% of the voting rights. Under the group regime, losses may be set off against profits of other group members if a group has been formed

Small company/alternative tax regimes: Not applicable, but see above

Corporate taxation: compliance

Tax year: The calendar year

Consolidated returns: Not required

Filing and payment: Tax returns have to be submitted within 6 months after the calendar year end. The tax bcomes due upon assessment and must be paid with 30 days of its due date. Payments on account are often requested by the Tax Authorities o

Penalties: Depending on case by case.

Rulings: A predefined ruling system has been introduced with effect from 1 Jan 2017. However, rulings are difficult to reach due to the different EU-efforts of control of such rulings.

Taxation of individuals

	Rate
	Personal Income Tax
Ranges From	3.5% for income exceeding CHF 15’000
To	28% for income for income exceeding CHF 200’000

1. Municipalities levy a surcharge on the tax calculated, which may not be lower than 150% or higher than 250%
2. The total rate, however, cannot exceed 28%

Residence: Individuals resident in Liechtenstein are subject to income taxes. Individuals are regarded as resident in Liechtenstein if they reside with the intention of staying here permanently. Individuals staying temporarily for more than 6 months are regarded as residents.

Basis: Income of husband and spouse are aggregated for tax purposes. Taxable assets include domestic immovable property and in general all movable property including investments, bankable assets, precious metals and all other personal property including art, cars etc. applying a notional income rate of 4% in addition to ordinary income like salary, benefits in kind, pension income, directors’ remuneration or other business and professional income.

Taxable income: The net wealth is multiplied by a standard rate to arrive at the notional income. The rate is provided annualy, but has been unchanged since 2012. Such notional income becomes a part of the taxable income

Capital gains: Capital gains on domestic immovable property are tax exempt, but are subject to real estate gains tax. Immovable assets kept abroad are exempt. Capital gains from movable assets are also exempt from these taxes.

Deductions and allowances: There are different deductions for minor children, divorsed spouses, premiums for private life insurances, the cost of education for children, charitable donations in the EEA and Switzerland. Additionally, there is a general allowance up to CHF 15’000, for married couples up to CHF 30’000.

Foreign tax relief: Depending on Double Tax Treaties applicable

Taxation of individuals: compliance

Tax year: The calendar year

Filing and payment: Taxpayers receive a tax return form to be filed by the end of April of the coming calendar year. In the assessment decree, the Tax Authorities specify the tax assessment basis, the tax rate applicable and the amount of taxes due. Generally, the tax must be paid within 30 days from due date. If the taxpayer leaves the country, the tax must be paid at the latest on the date of the move.

Penalties: Depending on the individual case

Rulings: A predefined ruling system has been introduced with effect from 1 Jan 2017

Withholding taxes

Not applicable

Branch remittance tax: Not applicable

Anti-avoidance legislation

Transfer pricing: All transactions between related parties must be concluded at arm’s length. Otherwise, the Tax Authorities may adjust the profit and capital and assets taxes based on the adjusted values

Interest restriction: Interest rates to apply between related parties are published by the Tax Authorities on an annual basis for the respective calendar year. There are no thin capitalization rules.

Controlled foreign companies: There is no CFC legislation

Hybrid mismatches: Not applicable

Disclosure requirements: Not applicable

Exit taxes: Not applicable

General anti-avoidance rule: Under the general rule, any structure or transaction that is not proper for the economic circumstances and that has a sole purpose of attaining tax benefits is considered abusive if – by entering into such transaction, the taxpayer violates the object and purpose of the tax legislation and – the taxpayer is unable to present any substantial economic or other reasoning for the transaction and the transaction does not generate any economic results.

Digital services tax and Other significant anti-avoidance legislation: None yet introduced

Value-added tax/Goods and services tax

Type of tax: A joint value added tax system with Switzerland is applicable. VAT is a non-cumulative, multi-stage tax which provides for the deduction of input tax

Standard rate: 7.7%

Reduced rates: Depending on services provided 2.5% to 3.7%. 0% on exports, the temporary suplly of foreign goods and the supply of work on movable goods for foreign persons to the extent the goods are exported.

Registration: Registration has to take place if the turnover exceeds CHF 100’000.

Filing and payment: On a quarterly basis either on invoiced turnover income or on collected turnvover income

Social security contributions

	Employer	Employee
	Rate (%)	Rate (%)
Band 1	5% or higher, depending on plan	5% or higher depending on plan

Self-employed

Around 12%, depending on the individual case

Other taxes

Capital duty: Not applicable

Immovable property taxes: There is no real estate tax, but the immovable property may be subject to the net worth tax and the real estate capital tax, see respective sections.

Transfer tax: Not applicable

Stamp duty: 1% stamp duty on subscribed capital exceeding CHF 1 Mio

Net wealth/worth tax: See above

Inheritance/gift taxes: No inheritance and gift taxes, but gifts made/received and inheritance exceeding CHF 10’000 in value/in kind must be disclosed in the tax return

Other: None

Tax treaties

Different Double Tax Treaties are in force with the following countries: – Andorra, Austria, Czech Republic, Georgia, Germany, Guernsey, Hongkong, Hungary, Iceland, Jersey, Lithuania, Luxembourg, Malta, Monaco, Netherlands, San Marino, Singapore, Switzerland, United Arab Emirates, United Kingdom, Uruguay. With Bahrain, Italy, Romania agreements are initialled, but not ratified.