passports.io website
residencies.io website
Bank Accounts website
Flag Theory website

Liechtenstein

Aktiengesellschaft (Corporation)

Taxes

Tax residency – Companies registered in Liechtenstein or its place of effective management in Liechtenstein are deemed to be residents for tax purposes.

Basis – Corporate income tax is levied on worldwide profits. However, profits derived from foreign branches or permanent establishments, foreign real properties and profits undistributed by foreign subsidiaries may not be subject to taxation.

Tax rate – All companies are subject to a corporate tax of 12.5%.

Capital gains – Capital gains are treated as ordinary income and taxed at the standard rate. However, capital gains derived from the sale of shares are tax-exempt and capital gains derived from the sale local properties are taxed separately under a real estate property tax of 24%

Dividends – Dividends received are usually tax-exempt.

Interests – Interests are subject to corporate income tax.

Royalties – Royalties are generally taxable at both federal, communal and cantonal levels. However, some cantons have introduced a patent box regime, where royalties may be tax-exempt or taxed at reduced rates.

Foreign-source income – Foreign-source income is taxable at standard rates, except dividend income, foreign real estate capital gains and income from foreign P.E. and branches.

Withholding taxes – There are no withholding taxes on dividends, interests, royalties and fees paid to non-residents.

Losses – Losses arising from taxable income may be carried forward indefinitely. Carryback of losses is not allowed.

Inventory - Inventory may be valued at the lower of acquisition/production costs or market value. To determine costs are allowed First in first out (FIFO) or average cost methods.

Anti-avoidance rules – Liechtenstein has not formally introduced transfer pricing regulations or documentation requirements, but transactions must be carried out on arm’s length terms.

There are no thin capitalization rules, nor controlled foreign company regulations.

Labor taxes – Employers and employees are required to make contribution to several social security insurance funds:

Old age, survivors’, and disability insurance (9.3%, 4.75% by the employer and 4.55% by the employee); Family compensation fund (1.9% by the employer); Unemployment insurance/supplementary unemployment insurance (1%, 0.5% by the employer and 0.5% by the employee); Occupational accident insurance (0.1% by the employer); Occupational pension scheme (depending on pension plan)

Tax credits and incentives – There are tax exemptions for for entities that have an irrevocable charitable, cultural, or ideal purpose without commercial activity, as well as for dividend income and capital gains on participations.

Private Asset Structures may enjoy tax exemptions and are only subject to a minimum tax of CHF 1,800 per annum. To be eligible as a Private Asset Structure, the company must not conduct any economic activity, and its activity should be limited to acquiring, holding, administrating, and selling financial instruments according to the Liechtenstein assets management law as well as cash and bank accounts. Participations may only be held if it can be proved that the shareholders or beneficiaries have no influence on the administration of this company.

There is also a Notional Interest Deduction on Equity, which is a standardised deduction for interest on equity based on the multiplication of the modified equity by the interest rate.

Personal income tax – An individual is deemed to be tax resident in Liechtenstein, if he or she resides or intends to stay in Liechtenstein permanently.

Resident individuals are taxed on their worldwide income, except for profits from, and net wealth in, foreign businesses, foreign branches and foreign immovable property.

Tax rates are progressive up to 8%. There are municipal taxes, which are multiplies that range from 1.5 to 2.5.

Capital gains on movable assets are tax-exempt. Capital Gains derived from local real estate is subject to a Real Estate Profit Tax of 24%.

Other taxes – The sale and import of goods and services are subject to V.A.T. at a standard rate of 7.7%. Reduced rates and exemptions may apply.

A stamp tax is levied on the transfer of securities, tax rate is 0.15% for Swiss and Liechtenstein securities and 0.3% if is issued by non-resident.

A capital duty of 1% is levied on the issuance and increase of the equity of Liechtenstein corporations. However, the first CHF 1,000,000 of capital is exempt from capital duty.

  • Offshore Income Tax Exemption
  • Offshore capital gains tax exemption
  • Offshore dividends tax exemption
  • CFC Rules
  • Thin Capitalisation Rules
  • Patent Box
  • Tax Incentives & Credits
  • Property Tax
  • Wealth tax
  • Estate inheritance tax
  • Transfer tax
  • Capital duties
  • 12.5% Offshore Income Tax Rate
  • 12.5% Corporate Tax Rate
  • 12.5% Capital Gains Tax Rate
  • 0% Dividends Received
  • 0% Dividends Withholding Tax Rate
  • 0% Interests Withholding Tax Rate
  • 0% Royalties Withholding Tax Rate
  • 0 Losses carryback (years)
  • Indefinitely Losses carryforward (years)
  • FIFOAverage cost Inventory methods permitted
  • 5.00% Social Security Employee
  • 7.25% Social Security Employer
  • 28% Personal Income Tax Rate
  • 8% VAT Rate
  • 37 Tax Treaties

Country details

Liechtenstein
CHF
Vaduz
Europe
d e - L I
35000

The Principality of Liechtenstein, is a small German-speaking landlocked state of alpine Europe that borders with Switzerland to the west and Austria to the east.

It is an enclave that, along with Switzerland, is not part of the European Union, but is part of the Schengen Area.

Its international relations are coordinated with Switzerland (state with whom it delegates its military defense).

It has an area of just over 160 sq. km and it is inhabited by about 37,000 people. The capital is Vaduz and the most populated city is Schaan.

Liechtenstein is the fourth smallest country in Europe, after Vatican City, Monaco and San Marino. Its resident population is composed of about a third of foreigners, mainly Germans, Austrians, Swiss and Italians.

Liechtenstein is a constitutional monarchy, headed by the prince, or Fürst. The sovereignty of the state is shared between the prince and the citizens, who choose a parliament. The parliament of Liechtenstein, the Landtag, is composed of 25 representatives chosen by the people. A five-member chamber is responsible for daily political affairs.

The country has an economic union with Switzerland and uses the Swiss franc as national currency, although it had its own currency, the Liechtenstein franc.

Liechtenstein is a member of the European Economic Area (an organization that acts as a bridge between the European Free Trade Association (EFTA) and the European Union) since May 1995.

Its economy, despite its small size and scarcity of natural resources, is highly industrialized, free-enterprise oriented and has the third highest per capita income in the world, after Qatar and Luxembourg.

Its economic bases are industrial exports, tourism and financial services.

Industries include electronics, textiles, precision instruments, metal manufacturing, power tools, anchor bolts, calculators, pharmaceuticals, and food products.

It has an important financial centre, specialized in financial services for foreign entities and wealth management for non-resident individuals.

Low business taxes and a very advantageous incorporation laws have led to a significant number of multinational companies to establish nominal offices in Liechtenstein.

Regarding the primary sector, it produces wheat, barley, corn, potatoes, dairy products, livestock, and wine.

Tax treaties

Country Type Date Signed
Finland TIEA 2010-12-17
Denmark TIEA 2010-12-17
France TIEA 2009-09-22
Germany TIEA 2009-09-02
United Kingdom TIEA 2009-08-11
Antigua and Barbuda TIEA 2009-11-24
Singapore DTC  2013-06-27
Ireland TIEA 2009-10-13
Japan TIEA 2012-07-05
Luxembourg DTC  2009-08-26
Iceland TIEA 2010-12-17
Guernsey DTC  2014-06-11
India TIEA 2013-03-28
Greenland TIEA 2010-12-17
Italy TIEA 2015-02-26
Switzerland DTC  1995-06-22
Canada TIEA 2013-01-31
Hong Kong, China DTC  2010-08-12
Czech Republic DTC  2014-09-25
Faroe Islands TIEA 2010-12-17
Australia TIEA 2011-06-21
Sweden TIEA 2010-12-17
China TIEA 2014-01-27
San Marino DTC  2009-09-23
Uruguay DTC  2010-10-18
Austria DTC  1969-11-05
Malta DTC  2013-09-27
Norway TIEA 2010-12-17
Mexico TIEA 2013-04-08
South Africa TIEA 2013-12-06
Netherlands TIEA 2009-11-10
Andorra TIEA 2009-09-18
Monaco TIEA 2009-09-21
Saint Vincent and the Grenadines TIEA 2009-10-02
Saint Kitts and Nevis TIEA 2009-12-11
Belgium TIEA 2009-11-10
United States TIEA 2008-12-08

Procedures

We can help you incorporate a Aktiengesellschaft (Corporation) in Liechtenstein.
Please, contact us to request a free, no obligation consultation.

Disclaimer

Although we use our best efforts to keep the information of this site accurate and up-to-date, we make no representations or warranties with respect to the accuracy, applicability, fitness, or completeness of the contents of this website. We disclaim any warranties expressed or implied, merchantability, or fitness for any particular purpose. We shall in no event be held liable for any loss or other damages, including but not limited to special, incidental, consequential, or other damages. The contents of this website are just for illustrative purposes and are NOT to be considered as a legal opinion or tax advice and should not be relied upon as such. Far Horizon Capital Inc., and any associated company, is not engaged in the practice of law or tax. If you wish to receive a legal opinion or tax advice on the matter(s) in this website please contact our offices and we will refer you to an appropriate legal practitioner. Use of our websites FlagTheory.com, Incorporations.io, Residencies.io, Passports.io, is subject to our terms and conditions.

Flag Theory Weekly Letter

Subscribe to receive Internationalization, Business-driven Structuring Intelligence directly to your inbox. You will also get the Flag Theory Master Course, a 1-month course with valuable and actionable information that you must consider when going global.

Your privacy is important for us and we will keep your information secure. View our privacy policy

View past newsletters