Liechtenstein legal and accounting and tax considerations in 2023
Healy Consultants helps our Clients to define and fulfil their annual tax, accounting, auditing and legal obligations.
- Liechtenstein entities that engage in commercial activity suffer a flat corporation tax of 12.5% on taxable profits and must submit audited financial statements to the Liechtenstein tax administrator;
- Liechtenstein entities that do not engage in commercial activity must pay an annual minimum tax of €1,200 payable annually to the Liechtenstein Tax Authority and must submit unaudited financial statements to the Government. For all forms of income aside from local real estate and intellectual property royalties, there is no further tax to pay for these entities;
- Liechtenstein’s 2011 tax reform abolished i) inheritance tax ii) estate tax iii) gift tax iv) capital gains tax v) non-residents tax vi) distributions surcharge and vii) coupon tax;
- Liechtenstein company law allows entities to carry forward losses indefinitely;
- For our Clients to enjoy Liechtenstein’s tax advantages, the Government will i) interpret and apply the 2011 tax regulations strictly and ii) perform a case-by-case assessment to determine whether any commercial activities are taking place.
- Liechtenstein is considered to be part of Switzerland for customs and VAT purposes, thanks to a 1923 customs union;
- The main VAT rate in Liechtenstein is 8%. Companies must register once their annual revenues exceed CHF100,000 and file their VAT returns quarterly;
- It is important our Clients’ are aware of their personal and corporate tax obligations in their country of residence and domicile; and they will fulfill those obligations annually. Let us know if you need Healy Consultants’ help to clarify your annual reporting obligations.
- Liechtenstein trusts are subject to a flat annual tax of 1,800. There are no specific Government reporting and tax fillings necessary to be submitted for this annual tax.
- All companies are required to appoint a local auditor however only those meeting this criteria (click link) will need to undergo an annual audit. Healy Consutlants Group will assist you appoint a local auditor for a one time fee. Auditors appointment and audit fees (when required) are thereafter paid directly by our Client to the audit Firm;
Personal tax for employees in Liechtenstein
Since more than half of Liechtenstein’s workforce commutes from the nearby countries of Switzerland, Germany and Austria, the tax treatment of these workers’ income is more complex than a single tax rate. While resident employees in Liechtenstein have tax withheld at source, here is the treatment for cross-border commuters:
- Employees resident in Switzerland: Swiss-resident employees working as cross-border commuters in Liechtenstein are taxed on their employment income only in Switzerland. No tax is withheld at source for these employees;
- Employees resident in Germany: Commuting from Germany to work in Liechtenstein is not tax-efficient, as the income is subject to tax both in Liechtenstein (deducted at source) and in Germany;
- Employees resident in Austria: Liechtenstein deducts a 4% tax at source for the employment income of Austrian-resident workers. This tax is deductible from the worker’s Austrian tax bill, and the Austrian authorities will tax the remainder in full.
Liechtenstein’s government has more information on this page.
Healy Consultants' fees for accounting and tax support
Liechtenstein accounting and tax task € Liechtenstein active company unaudited annual tax and accounting 4,300 Liechtenstein dormant company unaudited annual tax and accounting 1,450 Liechtenstein active company audited annual tax and accounting 7,950 Liechtenstein VAT monthly reporting 750 Liechtenstein personal tax return 1,250 Liechtenstein company residence certificate 1,750 Tax Authority written confirmation of legal tax exemption 4,500 Average monthly bookkeeping service fees 750 Average employee payroll accounting fees 650 Company deregistration fees 2850
Legal and compliance
- Liechtenstein signed 20 Tax Information Exchange Agreements, meaning the country complies with internationally agreed standards of tax transparency and information exchange;
- Foreign companies must apply for a Liechtenstein trade license if commercially active in the domestic market;
- Liechtenstein social services must be notified if the company hires local personnel;
- If hiring European employees resident outside of Liechtenstein, our Clients must register these new staff at the Migration and Passport Office at least 10 days before they begin their employment;
- Liechtenstein entities must comply with the regulations outlined in i) The Persons and Companies Act of January 20th, 1926 (PGR) ii) The National and Municipal Taxes Act of September 23rd, 2010 (Tax Act) iii) the Regulation on National and Municipal Taxes of December 21st, 2010 (Tax Regulation) iv) the Regulation on the Commercial Register of February 11th, 2003 (Commercial Register Regulation);
- Liechtenstein is a member of the United Nations, the Council of Europe, EFTA and the EEA. The official currency of The Principality of Liechtenstein is the Swiss Franc;
- Company law in Liechtenstein is governed by the Persons and Companies Act of 1926. Liechtenstein is the only country in continental Europe to have a law on registered trusts. This is unusual because most civil law jurisdictions do not have a concept of trusts;
- The powers of Liechtenstein corporate bodies are contained in the companies’ statutes. Legislation and corporate documents are in German, but foreign language translations can be obtained.
If the Liechtenstein entity’s annual sales revenue exceeds CHF100,000, it must register for VAT. There are three important EU VAT rules:
- When importing products into the EU and selling the products within EU and EEA countries, a foreign company must register for VAT if sales exceed a certain amount of turnover in any one European country. The trigger limit varies by country;
- Find more details on EU VAT rules on our page about EU directives;