The new Tax Act came into force in January 2011 (Act of 23 September 2010 concerning National and Municipal Taxes – “Gesetz vom 23. September über die Landes- und Gemeindesteuern”). This gave the Principality of Liechtenstein simple, internationally compatible tax laws which are compliant with European law.
Tax on earnings
In general terms, tax on earnings for all legal entities domiciled in the Principality of Liechtenstein amounts to 12.5% of taxable net earnings, with a minimum tax charge of CHF 1,800.00 per annum.
Capital and coupon taxes are no longer imposed.
The attributable tax base does not include
- capital gains
- earnings of non-domestic permanent establishments
- tenancy and franchise earnings from non-domestic real estate assets
- real estate capital gains
- capital growth from inheritance, bequest or gifting
- capital contributions including à fonds perdu benefits
Furthermore, an equity capital interest deduction, currently amounting to 4%, is also permitted. This reduces the attributable tax base, thus lowering the effective tax rate. The interest rate is adjusted annually by the tax administration on the basis of the general interest level.
The modified equity capital is calculated as follows:
+ einbezahltes Grundkapital
- Beteiligungen an juristischen Personen
- ausländisches Grundvermögen
- ausländisches Betriebsstättenvermögen
- nicht betriebsnotwendiges Vermögen
= modifiziertes Eigenkapital
Private asset structures
Drawing upon the rules of the Luxembourg Société de Gestion de Patrimoine Familial (SPF), a new tax privilege for legal entities which engage exclusively in asset management and do not exercise any economic activity has now replaced the special company taxes. This involves the creation of so-called private asset structures (Privatvermögensstrukturen – “PVS”). The restrictions applicable to the PVS need to be stipulated in the articles of association.
PVS status is granted by the tax administration, upon request.
PVS are subject to the minimum earnings tax charge of CHF 1,800.00 per annum.
In the case of trusts which are domiciled or maintain their management in the Principality of Liechtenstein, only the minimum earnings tax of CHF 1,800.00 is imposed. No tax assessment is required.