How does the Liechtenstein tax system benefit companies?

The Liechtenstein tax system offers a flat corporate tax rate of 12.5%, no trade tax, and options like notional interest deduction, making it highly attractive for international businesses.

What is the current Liechtenstein income tax structure?

Liechtenstein income tax is based on residence and applies to global income for residents. It includes deductions and moderate rates, with favorable treatment of pensions and family expenses.

What is the Liechtenstein corporate tax rate?

The Liechtenstein corporate tax rate is 12.5%, one of the lowest in Europe, applying equally to domestic and international companies registered in the country.

What is the standard Liechtenstein VAT rate?

The Liechtenstein VAT rate is 7.7%, harmonized with Switzerland. Reduced rates of 2.5% and 3.7% apply to essential goods and hospitality services.

Does Liechtenstein impose a capital gains tax?

There is generally no Liechtenstein capital gains tax for private individuals, unless the gains are derived from professional business activity.

Is there a Liechtenstein wealth tax?

No, Liechtenstein does not impose a wealth tax on individuals, which is a key reason it remains attractive for high-net-worth residents.

How is property taxed in Liechtenstein?

There is no national Liechtenstein property tax, though local municipalities may charge minor fees related to land use or real estate improvements.

Who qualifies for Liechtenstein tax residency?

Individuals who spend more than 183 days in the country or maintain a permanent residence can obtain Liechtenstein tax residency and benefit from favorable tax rates.

Are Liechtenstein tax regulations internationally compliant?

Yes, Liechtenstein tax regulations are aligned with OECD and EU standards, including CRS, AML, BEPS, and full transparency under its modernized tax laws.

Home
→
Taxation in Liechtenstein

taxation in Liechtenstein

Dari Podhur, Counsel

2 April, 2025

Table of Content

Introduction to taxation in Liechtenstein
Overview of the Liechtenstein tax system
Liechtenstein income tax
Liechtenstein corporate tax
Liechtenstein VAT rate
Liechtenstein capital gains tax and wealth tax
Liechtenstein property tax
Liechtenstein tax residency
Liechtenstein tax regulations and compliance
Advantages of the tax system
Filing and reporting obligations
Conclusion

A Transparent Yet Tax-Friendly Jurisdiction

Despite being one of Europe’s smallest nations, Liechtenstein is globally recognized for its robust legal framework, strong economy, and modern fiscal policies. With a tax regime that balances competitiveness with international compliance, taxation in Liechtenstein has become a subject of interest for private individuals, corporations, and international advisors.

This guide explores the essentials of the Liechtenstein tax system, including income and corporate taxes, VAT, property-related taxation, and tax residency rules. You'll also find legal references to help you navigate the landscape with accuracy and confidence.

Overview of the Liechtenstein Tax System

The foundation of taxation in Liechtenstein lies in its 2011 Tax Act (Steuergesetz), which modernized the country’s fiscal framework to align with OECD and EU standards. This system is relatively simple compared to many neighboring jurisdictions and provides predictable treatment for both individuals and businesses.

Legal source: https://www.gesetze.li/konso/2009084000 – Liechtenstein Tax Act

Taxes are levied at both national and municipal levels, covering personal income, corporate profits, and consumption.

Liechtenstein Income Tax

Liechtenstein income tax applies to individuals who are considered tax residents. Income tax is progressive but moderate by European standards.

Rates: Combined national and municipal rates typically range from 7.5% to 22.4%
Scope: Residents are taxed on worldwide income; non-residents only on Liechtenstein-source income
Deductions: Available for dependents, health insurance, housing costs, and pension contributions

More info: https://www.llv.li/inhalt/11755/amtsstellen/steuerverwaltung – Tax Administration Office

Liechtenstein Corporate Tax

Corporations benefit from a flat Liechtenstein corporate tax rate of 12.5%, which is among the lowest in Europe. Key features include:

No trade tax
Deduction of notional interest on equity
Unlimited loss carry-forward
No separate capital tax

This makes Liechtenstein an appealing destination for holding companies, family offices, and international structures.

Liechtenstein VAT Rate

The Liechtenstein VAT rate is aligned with Switzerland’s due to their shared customs and currency union. VAT is administered by the Swiss Federal Tax Administration.

Standard rate: 7.7%
Reduced rate: 2.5% (for food, medicine, books)
Special rate: 3.7% (for hospitality)

VAT info (Swiss tax office): https://www.estv.admin.ch

Liechtenstein Capital Gains Tax and Wealth Tax

For individuals, there is no general Liechtenstein capital gains tax unless gains are part of professional business activities. This provides significant advantages for private investors and asset managers.

Similarly, there is no Liechtenstein wealth tax, which distinguishes the jurisdiction from neighbors like Switzerland.

Trusts and foundations are popular tools to consolidate and protect wealth, benefiting from tax neutrality.

Liechtenstein Property Tax

Unlike many European countries, there is no national Liechtenstein property tax. However, municipalities may impose small local fees related to land or real estate improvements.

Real estate transfers are not subject to VAT, and related costs are generally limited to registration and notarial fees.

Liechtenstein Tax Residency

Liechtenstein tax residency is typically established if an individual:

Maintains a permanent home in Liechtenstein, or
Spends more than 183 days in the country per calendar year

Becoming a resident allows full access to Liechtenstein’s favorable tax treatment, but applicants must obtain residency permits through the Immigration Office: https://www.llv.li/inhalt/11705/amtsstellen/auslander-und-passamt

Liechtenstein Tax Regulations and International Compliance

Liechtenstein tax regulations are designed to comply with global standards while preserving client confidentiality. The country is a member of the OECD’s Global Forum and follows the Common Reporting Standard (CRS).
Regulatory highlights:

Adheres to BEPS (Base Erosion and Profit Shifting) rules
Participates in over 20 Double Taxation Agreements (DTAs)
Full AML and KYC regulations overseen by the Financial Market Authority (FMA): https://www.fma-li.li

Liechtenstein’s transparency reforms have helped it shed its former image as a “tax haven,” while maintaining tax efficiency for legitimate business and personal use.

Key Advantages of the Liechtenstein Tax System

Simple and transparent tax code
Low Liechtenstein corporate tax and income tax rates
No Liechtenstein wealth tax or capital gains tax for individuals
Favorable Liechtenstein VAT rate and exemptions
Predictable Liechtenstein tax regulations in line with international norms

These features make the Liechtenstein tax system particularly attractive for family offices, high-net-worth individuals, entrepreneurs, and multinational companies.

Tax Filing and Compliance

Taxpayers—both corporate and individual—must file annual returns. Extensions are often granted, and filings can be completed digitally or through licensed tax representatives.

Corporate entities must also maintain proper accounting and submit financial statements. For certain activities (e.g. financial services), enhanced reporting obligations apply under the supervision of the FMA.

Conclusion: Smart, Stable, and Internationally Compliant

Taxation in Liechtenstein blends low rates with legal certainty and cross-border compatibility. From simplified tax reporting to favorable Liechtenstein tax rates on income and corporate profits, the country offers a transparent and efficient fiscal environment.

With no wealth tax, minimal property tax, and zero capital gains tax for most individuals, Liechtenstein remains an elite destination for strategic tax planning.

Taxation in Liechtenstein is characterized by its simplicity, competitiveness, and legal certainty — making it an attractive choice for both individuals and corporations. Whether you're looking to optimize your tax strategy or ensure full compliance, our experts are here to support you.

📩 Contact us today for a detailed consultation on taxation in Liechtenstein. We’ll assign a dedicated tax advisor, answer your specific questions, and provide a personalised presentation covering corporate, personal, and international tax aspects relevant to your situation.

Questions and Answers

Taxation in Liechtenstein for individuals is moderate and progressive, with income tax rates ranging from 7.5% to 22.4%, and no wealth tax or capital gains tax for private investments.