Tax laws Liechtenstein
Liechtenstein's taxation system is characterized by relatively low rates and a favorable environment for both individuals and businesses. The government has taken significant steps to align its tax policies with international standards, enhancing transparency and cooperation.
1. Personal Income Tax:
Basic Rate: The basic rate is 1.2%.
Combined Rate: When including the additional income tax imposed by communes, the combined rate reaches 17.82%.
Social Security Contributions: An additional 4.3% is levied under the country's social security program for employees. Self-employed individuals face higher contributions, up to a maximum of 11%. This brings the maximum income tax rate to approximately 29%.
2. Wealth Tax:
Basic Rate: The basic tax rate on wealth is 0.06% per annum.
Combined Rate: Including all components, the combined total rate is 0.89%.
3. Corporate Income Tax:
- Tax Rate: The tax rate on corporate profits is 12.5%.
4. Gift and Estate Taxes:
- Rates: These taxes vary depending on the relationship between the recipient and the giver, as well as the amount of the inheritance. For spouses and children, the tax ranges between 0.5% and 0.75%. For non-related recipients, it ranges between 18% and 27%. The estate tax is progressive.
5. Regulatory Developments:
In 2010, Liechtenstein underwent a comprehensive revision of its tax laws, effective from January 1, 2011. This overhaul aimed to align the tax system with international and European standards, including regulations concerning state aid. The previous tax laws from 1961, which still contained elements from the 1923 legislation, were replaced with a new, comprehensive taxation system. These changes have been monitored by the EFTA Surveillance Authority and the EFTA Court, ensuring compliance with European Economic Area (EEA) standards.
6. International Cooperation:
Liechtenstein has demonstrated a commitment to international tax cooperation. In October 2015, the European Union and Liechtenstein signed an agreement to ensure the automatic exchange of financial information in tax matters. The collection of data began in 2016, marking a significant step toward aligning the principality with other European countries regarding taxation of private individuals and corporate assets.
Note: Tax laws and regulations are subject to change. For the most current information, it is advisable to consult official Liechtenstein government sources or seek professional tax advice.
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