GSL / Foreign Companies Audit / Audit Liechtenstein

Liechtenstein company audit, financial statements, accounting, consulting in Liechtenstein

Liechtenstein, a principality in the European Union next door to Switzerland and Austria, is considered a low-tax jurisdiction. Among the advantages of the jurisdiction are the confidentiality of the beneficiaries, the absence of foreign exchange controls, and low tax rates compared to other European countries. In addition, profits from the sale of shares in local and foreign companies are not taxed, and dividend income is exempt from taxation. Micro-companies and small companies can claim exemption from audits, and the possibility of filing a shortened report.

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Service packages «Liechtenstein-AG» Service packages «Liechtenstein-Anstalt» Legislation Tax System Audit Services
Preparation of annual financial statements and tax reports
EUR 100-350 per hour
Preparation and submission of VAT / VIES / INTRASTAT returns
EUR 100-350 per hour
Consulting services and support during tax audits
EUR 100-350 per hour

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Legal requirements

Companies operating in Liechtenstein must provide their financial statements annually. Financial statements consist of a balance sheet, profit and loss statement and notes to accounts. Annual financial statements and consolidated financial statements must be audited and filed with the Office of Justice.

After the documents have been filed, the Office of Justice declares the registration number under which the documents have been filed in the Electronic Official Gazette (Elektronisches Amtsblatt). It is done at the company’s expense. Companies whose shares or bonds are listed on a stock exchange must publish their (consolidated) annual financial statements in printed form and must make them available to the press and any interested party at request.

Financial year corresponds to tax year. A reporting period can end on any day of a calendar year.

The following companies must disclose their annual financial statements:

  • Companies limited by shares (AG);
  • Companies with limited liability (GmbH)
  • Partnerships limited by shares;
  • European companies;
  • General partnerships;
  • Limited partnerships.

General partnerships and partnerships limited by shares are allowed to not file accounts with the Office of Justice but must keep financial statements at the registered address in Liechtenstein and be ready to provide them immediately after they receive a request from inspection authorities (for instance, the tax inspectorate).

Micro companies can be exempt from requirements regarding annual financial statements, can be exempt from audit and can be allowed to file a condensed report if the following conditions are met.

Conditions for classifying a company as a micro company (2 or more criteria must be met simultaneously):

  1. turnover is not more than 900,000 CHF;
  2. balance sheet total is not more than 450,000 CHF;
  3. average number of employees is not more than 10.

Micro companies must file:

  • Condensed balance sheet (publication in the Commercial Register);
  • Condensed profit and loss statement.

A company is considered small in the first financial year if it meets at least two of the following three conditions in that year.

A company is considered small in subsequent financial periods if:

  • the below conditions are met in the current and previous financial year;
  • the below conditions are met in the current financial year, and the company was considered small in the previous financial year;
  • the below conditions were met in the last financial year, and the company had been considered small in the previous financial year.

Conditions for classifying a company as a small company (2 or more criteria must be met simultaneously):

  1. turnover is not more than 14,800,000 CHF;
  2. balance sheet total is not more than 7,400,000 CHF;
  3. average number of employees is not more than 50.

Small companies must file:

  • Condensed balance sheet (publication in the Commercial Register);
  • Profit and loss statement;
  • Notes to accounts (publication in the Commercial Register).

IFRS are necessary for local public companies and for listed foreign companies. Small and micro companies are not required to comply with IFRS.

Annual financial statements and an annual report must be prepared in German and in Swiss francs, euros or US dollars.

Legal entities that must keep accounts but do not conduct business can also make annual financial statements and an annual report only in English, French, Italian, Spanish or Portuguese and in any freely convertible foreign currency.

Time frame for preparation and submission of financial statements and tax accounts

If a company must disclose its annual financial statements, its official representatives must provide the Office of Justice with relevant documents by the end of the 15th month after the reporting date of the balance sheet.

A tax return shall be filed by 1 July of the calendar year following the end of the tax year. Based on the tax return tax authorities issue a tax payment notice. The tax must be paid within 30 days after its receipt.

At a reasonable written request, tax authorities can extend the deadline for filing documents by six months. A preliminary bill must be paid in order to extend the deadline. In especially well-grounded cases, the deadline can be extended once more. Such a request must be made before the end of the first extension of the deadline.

Liability for late filing of accounts

The Office of Justice imposes a penalty on everyone who breaches their obligation to disclose information. In the case of deliberate intention, the penalty can amount to 5,000 CHF, and in the case of negligence, 1,000 CHF.

If a breach of the obligation to disclose information takes place as part of the legal entity’s business activity, the penalty is personally imposed on directors, authorized representatives, liquidators or members of the board that have not fulfilled their duties.

Companies that breach obligations to register and file documents can be imposed with a penalty of up to 250,000 CHF for an intentional breach and up to 100,000 CHF for a breach caused by negligence.

A company is considered medium-sized in the first financial year if it meets at least two of the following three conditions in that year:

  • the below conditions are met in the current and previous financial year;
  • the below conditions are met in the current financial year, and the company was considered medium-sized in the previous financial year;
  • the below conditions were met in the last financial year, and the company had been considered medium-sized in the previous financial year.

Conditions for classifying a company as a medium-sized company (2 or more criteria must be met simultaneously):

  1. turnover is not more than 51,800,000 CHF;
  2. balance sheet total is not more than 25,900,000 CHF;
  3. average number of employees is not more than 250.

Medium-sized companies must file:

  • Full balance sheet (publication in the Commercial Register);
  • Simplified profit and loss statement (publication in the Commercial Register);
  • Simplified notes to accounts (publication in the Commercial Register);
  • Annual report (publication in the Commercial Register);
  • Auditor’s report (publication in the Commercial Register).

A company is considered large in the first financial year if it meets at least two of the following three conditions in that year:

  • the below conditions are met in the current and previous financial year;
  • the below conditions are met in the current financial year, and the company was considered large in the previous financial year;
  • the below conditions were met in the last financial year, and the company had been considered large in the previous financial year.

Conditions for classifying a company as a large company (2 or more criteria must be met simultaneously):

  1. turnover is more than 51,800,000 CHF;
  2. balance sheet total is more than 25,900,000 CHF;
  3. average number of employees is more than 250.

Large companies must file:

  • Full balance sheet (publication in the Commercial Register);
  • Profit and loss statement (publication in the Commercial Register);
  • Notes to accounts (publication in the Commercial Register);
  • Annual report (publication in the Commercial Register);
  • Auditor’s report (publication in the Commercial Register).

Audit

In Liechtenstein criteria that make audit necessary do not apply to most small and micro enterprises.

Such companies, however, must follow a simplified review, i.e. in such a case auditing duties can be fulfilled by shareholders that are not managers of the company.

Annual financial statements of medium-sized and large enterprises must be audited by an auditor.

If a company exceeds the following criteria in two of the three cases during two consecutive financial years, it is considered medium-sized and must be audited annually:

  1. turnover is not more than 14,800,000 CHF;
  2. balance sheet total is not more than 7,400,000 CHF;
  3. average number of employees is not more than 50.

Medium-sized companies must file:

  • Full balance sheet (publication in the Commercial Register);
  • Simplified profit and loss statement (publication in the Commercial Register);
  • Simplified notes to accounts (publication in the Commercial Register);
  • Annual report (publication in the Commercial Register);
  • Auditor’s report (publication in the Commercial Register).

Conditions for classifying a company as a large company (2 or more criteria must be met simultaneously):

  1. turnover is more than 51,800,000 CHF;
  2. balance sheet total is more than 25 900 000 CHF;
  3. average number of employees is more than 250.

Large companies must file:

  • Full balance sheet (publication in the Commercial Register);
  • Profit and loss statement (publication in the Commercial Register);
  • Notes to accounts (publication in the Commercial Register);
  • Annual report (publication in the Commercial Register);
  • Auditor’s report (publication in the Commercial Register).

Consolidated financial statements

Consolidated financial statements consist of a consolidated balance sheet, consolidated profit and loss statement and notes, which are a coherent whole.

Consolidated annual financial statements must give truthful and objective representation of the assets, financial position and profits in general of the companies included in consolidation.

In certain circumstances such companies as investment or holding companies are exempt from the obligation to make a consolidated annual report. Exemption from consolidation obligations must be preapproved by the Office of Justice.

A parent company is exempt from the obligation to make a consolidated annual report if at least two of the following three criteria apply on the date of the balance sheet of the annual financial statements and on the date of the previous balance sheet:

  1. total assets on the balance sheets of the parent company and subsidiaries that must be included in consolidated financial statements do not exceed 31,000,000 CHF altogether;
  2. net sales of the parent company and subsidiaries that must be included in consolidated financial statements do not exceed 62,000,000 CHF in the financial year preceding the reporting date;
  3. the parent company and subsidiaries that must be included in consolidated financial statements did not have more than 250 employees on average in the financial year preceding the reporting date.

At least two of the following three characteristics apply on the reporting date of the consolidated annual financial report that must be prepared and on the previous reporting date:

  1. balance sheet total does not exceed 25,900,000 CHF;
  2. net sales in the financial year preceding the reporting date do not exceed 51,800,000 CHF;
  3. the parent company and subsidiaries that must be included in consolidated financial statements did not have more than 250 employees on average in the financial year preceding the reporting date.

A parent company (intermediate company) that at the same time is a subsidiary of a parent company whose registered office is located in a member state of the European Economic Area does not need to prepare a consolidated annual report.

However, a parent company (intermediate company) that is also a subsidiary of a parent company whose registered office is located in a member state of the European Economic Area must prepare a consolidated annual report if its securities are for trading in a member state of the EEA, in spite of the fact that there are exemption requirements.

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