TAXES IN LIECHTENSTEIN

Individuals who are tax residents in Liechtenstein are subject to Liechtenstein income tax on their worldwide income. The system is progressive, but the rates remain highly competitive.

• Taxable base: Worldwide income for residents; Liechtenstein-sourced income for non-residents.
• Rates: The combined national and municipal tax rate ranges from 7.5% to 22.4%.

Corporations enjoy one of the lowest standard tax rates in Europe. The Liechtenstein corporate tax rate is a flat 12.5% on net income, regardless of the size of the company.
Key features include:

• No additional trade tax
• Allowance for notional interest deduction on equity
• Losses can be carried forward indefinitely

Legal basis: https://www.gesetze.li/konso/2009084000 – Tax Act
This low corporate taxation fosters a highly attractive environment for both startups and multinational enterprises.

Value-added tax (VAT) in Liechtenstein is aligned with the Swiss VAT system, as the two countries form a customs and monetary union.

• Standard Liechtenstein VAT rate: 7.7%
• Reduced rate: 2.5% (e.g., for food and medicine)
• Special rate: 3.7% (accommodation services)

VAT compliance is administered by the Swiss Federal Tax Administration: https://www.estv.admin.ch

Unlike many jurisdictions, Liechtenstein does not generally impose a Liechtenstein withholding tax on dividends, interest, or royalties paid to non-residents.

However, a withholding tax of 4% may apply to certain insurance premiums. This makes Liechtenstein highly attractive for holding and finance companies.

A person becomes a Liechtenstein tax resident if they:

• Have their domicile or habitual abode in the country, or
• Spend more than 183 days per year in Liechtenstein

Liechtenstein tax residency allows individuals to benefit from low income taxes, no wealth tax, and access to the EEA market. Residency permits are subject to quotas and must be applied for through the Immigration and Passport Office: https://www.llv.li/inhalt/11705/amtsstellen/auslander-und-passamt

There is no Liechtenstein wealth tax for individuals, setting it apart from other European countries like Switzerland.

Capital gains are generally exempt from taxation for individuals, except when they qualify as business income (e.g., from professional trading). Therefore, for private investors, there is essentially no Liechtenstein capital gains tax.

While Liechtenstein does not levy a federal property tax, municipalities may charge minor property-related taxes or fees, such as land improvement levies. However, these are minimal and do not amount to a traditional Liechtenstein property tax as seen in many other nations.

Real estate transactions are also exempt from VAT and are subject to low registration fees.

Liechtenstein is fully committed to international tax transparency and automatic exchange of information (AEOI). It is a signatory to the OECD’s Common Reporting Standard (CRS) and has multiple double taxation treaties (DTTs), including with:

• Switzerland
• Austria
• Germany
• United Kingdom

Full list of treaties: https://www.llv.li/inhalt/11814/amtsstellen/internationale-steuerabkommen

Whether you are an entrepreneur, a global investor, or a high-net-worth individual, understanding taxes in Liechtenstein can open the door to a stable and business-friendly fiscal environment. With a low Liechtenstein corporate tax rate, no wealth tax, and minimal withholding tax, the principality offers both flexibility and legal certainty.

The Liechtenstein tax system is increasingly popular for those seeking residency or corporate structuring in a compliant European jurisdiction. By leveraging tools such as low Liechtenstein income tax and competitive Liechtenstein VAT rate, individuals and companies alike can find long-term tax efficiency without compromising transparency.