Just like in any other European country, Liechtenstein has a taxation system divided into corporate taxes, for legal entities, and individual taxes.
Corporate income tax in Liechtenstein
In principle, all corporations, foundations and establishments are subject of a profit tax at a flat rate of 12.5%. Resident companies in Liechtenstein are subject to unlimited tax liability on their worldwide income. Non – resident companies are subject to limited tax liability on income from properties or branches within Liechtenstein.
All legal entities are subject to an annual minimum corporate tax of 1,200 CHF.
The full tax amount is due even if the corporation is not resident in Liechtenstein for the entire tax period. Under a lone exception, minimum tax is not due if the total assets of a legal entity did not exceed 500,000 CHF during the last 3 years.
Other corporate taxes in Liechtenstein
The general VAT rate is 8%, with a deducted rate of 3.8% for lodging and accommodation services and of 2.5% for food deliveries, medicines, newspapers, books and magazines. Various services such as health, education, banking and insurance are exempt from VAT.
Switzerland custom duties and import tariffs are applicable for Liechtenstein as well. These duties and tariffs depend on the products that are imported.
Several excise taxes apply in Liechtenstein, for example a petroleum tax, a tobacco tax, a car tax, a beer tax, a salt tax , taxation of distilled spirits and a CO2 tax.
No property taxes are applicable in Liechtenstein.
The stamp duty tax includes the issuance stamp tax and the security transfer tax. Upon the formation of legal entities whose capital is divided into shares, the stamp duty amounts to 1% of the nominal value or the higher amount effectively paid. The first 1 million CHF is tax exempt. The same duty is due when capital is increased or when shareholders make contributions without increasing the capital. Bonds and money market certificates are exempt from stamp duty. Banks and financial intermediaries qualify as security dealers, which is why they need to pay a stamp duty tax for all transactions including securities, varying from 0.15% to 0.30%.
In the case of a company formation in Liechtenstein, a formation tax of 1% of the statutory capital is levied. This tax is reduced to 0.5% for amount higher than 5 million CHF and 0.3% for amount higher than 10 million CHF. Foundations are a subject of a formation tax rate of 0.2%, but at least 200 CHF.
Capital gains from the sale of real estate or equivalent actions are subject to a separately real estate profit tax. The basic tax rate might be up to 24%, depending on the amount of taxable real estate gain.
Individual taxes in Liechtenstein
Tax is levied on the resident taxpayer’s worldwide-earned income and on the net wealth. However, certain items are exempt from income taxes. Individuals who are not residents of Liechtenstein may be a subject to income taxes for certain Liechtenstein income sources such as permanent establishments, real estate, income from employed or self – employed activity, attendance fees or rental income. The tax rate varies depending on the personal income of each individual.
Other individual taxes in Liechtenstein
Capital gains from the sale of real estate or equivalent actions are subject to a real estate profit tax that may vary between 3% and 24%, depending on the amount of taxable real estate gain.
Movable and immovable assets are subject to the wealth tax, which is levied base don the fair market value. The taxable wealth tax is multiplied by a standard interest of 4%, to calculate a notional income.
Liechtenstein does not levy taxes on gifts or inheritances.
Dedication of assets to a non – taxable entity like a non – profit organization or under certain circumstances that make the assets no longer a subject to wealth taxation trigger a tax of 3.5% of the wealth tax value of contribution, payable by the donor.
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