Liechtenstein tax system: audit, reporting and optimization of taxation of Liechtenstein companies and individuals: VAT, income tax and capital gains

Basic taxes (briefly)

Personal tax 0-22,4%
Corporate tax (in detail) Companies pay income tax at the rate of 12.5%. There is a minimum tax of CHF 1,800, which can be set off against income tax
Capital gains tax. Details Capital gains are included in taxable income, except for capital gains arising from the sale of immovable property, which is subject to Liechtenstein property tax
VAT. Details The standard VAT rate is 7.7%. For some goods and services it is 2.5% and 3.7%
Other taxes Asset tax, Social contributions
Government fee No
Stamp duty 1%

International tax agreement

Andorra, Austria, Czech Republic, Georgia, Germany, Guernsey, Hong Kong, Hungary, Iceland, Jersey, Lithuania, Luxembourg, Malta, Monaco, San Marino, Singapore, Switzerland, the United Arab Emirates, the United Kingdom (UK), and Uruguay
   
Andorra, Antigua and Barbuda, Australia, Belgium, Canada, China, Denmark, Faeroe Islands, Finland, France, Germany, Greenland, Iceland, India, Ireland, Italy, Japan, Mexico, Monaco, Netherlands, Norway, St. Kitts and Nevis, St. Vincent and the Grenadines, South Africa, Sweden, the United Kingdom, and the United States


Show all entries Hide all entries

Personal Income Tax

Liechtenstein tax residents pay tax on their worldwide income and non-residents on income from sources in Liechtenstein.

Income tax is paid at the national and municipal level.

Tax rates at the national level are different for single individuals, married couples, and single parents with children.

For a taxpayer who is single, tax rates are:

  • Income below CHF 15,000 – 0%;
  • Income from CHF 15,000 to 20,000 – 1%;
  • Income from CHF 20,000 to 40,000 – 3%;
  • Income from CHF 40,000 to 70,000 – 4%;
  • Income from CHF 70,000 to 100,000 – 5%;
  • Income from CHF 100,000 to 130,000 – 6%;
  • Income from CHF 130,000 to 160,000 – 6.5%;
  • Income from CHF 160,000 to 200,000 – 7%;
  • Income over CHF 200,000 – 8%.

Municipal income tax is calculated as a percentage (from 150% to 250%) of the national tax.

Thus, the total national and municipal tax rate varies from 2.5% to 22.4%, depending on the level of income and place of residence.

For people who have moved to Liechtenstein, it is possible to apply a tax calculated on the basis of their living costs. In this case, one cannot work in Liechtenstein and must meet some other conditions.

The profit from the sale of shares in local and foreign companies is tax exempt. The exemption does not apply to shares that constitute a commercial asset if more than 50% of the foreign company's income is passive income and the company is taxed at low rates.

Dividend income is tax exempt. If dividends are paid by a company with at least 25% participation, the shares of which constitute a commercial asset of the taxpayer, such dividends should not be deducted by the paying party for tax purposes (this requirement does not apply if the shares are a personal asset of an individual). The exemption does not apply to dividends on shares of a foreign company if more than 50% of its income consists of passive income and the company is taxed at low rates.

Corporate Income Tax

Companies pay corporate income tax at the rate of 12.5%.

There is a minimum tax of CHF 1,800 which can be credited against the corporate income tax.

The profit from the sale of shares is tax exempt. The exemption does not apply if more than 50% of the income of the foreign company whose shares are being sold is passive income and the company is taxed at low rates.

Dividend income is tax exempt. If the income comes from a company with at least 25% participation, such dividends should not be deducted by the paying party for corporate income tax purposes. The exemption does not apply if more than 50% of the income of the foreign company distributing the dividend consists of passive income and the company is taxed at low rates.

CFC Rules

Liechtenstein has no CFC rules as such.

However, it should be noted that the use of structures aimed at tax evasion may have negative tax consequences.

Withholding Tax

Liechtenstein does not levy withholding tax.

VAT

The standard VAT rate is 7.7%.

The VAT rates of 2.5% and 3.7% apply to some goods and services.

Wealth Tax

Movable and immovable assets are subject to tax.

Generally, the tax base is a percentage (in 2021, 4%) of the market value of the assets. Such notional income is subject to ordinary income tax.

When transferring assets to a non-taxable entity or under circumstances that make the assets no longer subject to wealth tax, the transferor pays a 3.5% tax on the value of the assets (together with municipal tax, the rate can be up to 10.5%).

There is no inheritance or gift tax.

Social Security Contributions

The following social security contributions are paid:

  • Old age insurance, disability insurance – 9.991% (5.291% by the employer and 4.7% by the employee);
  • Family compensation fund – 1.9% (by the employer);
  • Unemployment insurance – 1% (by the employer and employee in equal shares);
  • Occupational accident insurance – about 0.1% (by the employer);
  • Pension insurance – contributions depend on the pension plan.

Stamp Duty

Stamp duty is payable when a company is formed or when its capital is increased.

The rate is 1% of the nominal and additional capital. The first CHF 1 000 000 is exempt.

There are also other cases where tax is charged at the establishment of legal entities.

The tax on securities transactions involving a dealer is 0.15% for Swiss and Liechtenstein securities and 0.3% for foreign securities.

Double Tax Agreements

Liechtenstein has exchange of information relationships:

20 DTT: Andorra, Austria, Czech Republic, Georgia, Germany, Guernsey, Hong Kong, Hungary, Iceland, Jersey, Lithuania, Luxembourg, Malta, Monaco, San Marino, Singapore, Switzerland, the United Arab Emirates, the United Kingdom (UK), and Uruguay.

27 TIEAs: Andorra, Antigua and Barbuda, Australia, Belgium, Canada, China, Denmark, Faeroe Islands, Finland, France, Germany, Greenland, Iceland, India, Ireland, Italy, Japan, Mexico, Monaco, Netherlands, Norway, St. Kitts and Nevis, St. Vincent and the Grenadines, South Africa, Sweden, the United Kingdom, and the United States.

Exchange Control

Liechtenstein has no exchange control.

    Taxes of Liechtenstein

    Min. rate for corporate tax 12,5%
    Capital gains tax Normal rate
    VAT 7,7%
    Withholding tax No
    Exchange control No
    Need a consultation from a specialist?
    Share on social media:
    RU EN