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Taxation in Liechtenstein

Taxation in Liechtenstein

Liechtenstein is one of the most prolific investment centers in Europe, therefore the Government has enabled a tax system which reflects this attribute. In order to attract foreign investorsLiechtenstein has one of the lowest corporate taxes in Europe: 12,5%. However, this is not the only tax levied in Liechtenstein.

If you want to open a company in Liechtenstein and need more information on the requisites, our local company registration agents can provide them to you.

Tax residency in Liechtenstein

The Liechtenstein taxation system applies to both individuals and companies, as seen above. Taxes in Liechtenstein are levied based on residency, meaning only companies with registered addresses and individuals with a domicile in the Principality will be taxed on the income they earn during a calendar year. In order to be able to pay their taxes, both companies and individuals must file annual tax returns with the local authorities.

Taxation of individuals in Liechtenstein

The Swiss franc is the national currency both individuals and companies use in Liechtenstein and it is also the currency used for taxation purposes. When it comes to individuals, they are taxed on the worldwide income and wealth and must file their annual tax filing by April 15th in order for the authorities to compute their taxes.

Individuals will be imposed a gradual income tax which starts at 1% and ends at 8%. The rate depends on the income of the individual and on his or her marital status.

Taxation of companies in Liechtenstein

Companies registered in Liechtenstein will be taxed on their worldwide income at a flat rate of 12,5% as mentioned above. Liechtenstein also signed several double tax treaties in order to avoid the double imposition of taxes with respect to branches of local companies operating abroad.

It is important to know that Liechtenstein offers many tax benefits to companies, among which no dividend, interest or royalties levies and no capital duty.

Other taxes applied in Liechtenstein

Apart from the personal and corporate taxes levied in Liechtenstein, the tax authorities also impose:

  • –          the value added tax (VAT), which is set at 8%;
  • –          the capital gains tax related to selling or renting real estate;
  • –          the payroll and social security taxes;
  • –          the stamp duty.

For full information on taxation in the Principality, please contact our company formation agents in Liechtenstein.