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Updated : 02/10/2014

Income taxes abroad – Liechtenstein

What's your situation?

I'm an employee

Which income will be taxed in Liechtenstein?

  • Live in Liechtenstein (min. 6 months in the tax year)?
    You are considered to be tax resident in Liechtenstein and you are subject to unlimited tax liability on your worldwide wealth and income.
  • Lived in Liechtenstein but less than 6 months in the tax year?
    You are not considered to be tax resident in Liechtenstein and you are only subject to limited tax liability on your wealth and income from Liechtenstein sources, including income from employment pursued in Liechtenstein.
  • Income from other EEA-/EU-countries?
    If your wealth or income are also taxed in another country, this could lead to double taxation. The Double Taxation Agreements of Liechtenstein provide rules for the avoidance of double taxation (list of all Liechtenstein Double Taxation Agreements).

How much will you pay?

Take your salary...

Salaries and wages are any amounts earned by an individual for work performed in a dependent position (employment), including ancillary income related to employment such as compensation for special services, commissions, bonuses and other similar payments.

Benefits in kind are subject to income tax at their market value or at a value fixed by the tax authorities.

...deduct eligible costs...

Costs directly related to employment income are deductible. This includes commuting costs, costs for further education and subsistence costs. Certain personal deductions, e.g. for a child, for education of children, medical expenses, are granted in proportion to the foreign wealth/income. A standard deduction of CHF 1,500 for extraordinary professional expenses is granted.

Employment income is subject to social security contributions to old age, survivors’ and disability insurance, the family compensation fund, compulsory health insurance as well as unemployment insurance. The contributions are shared between the employer and the employee. The rate of the employee contributions is 5.05 % of the gross salary. Furthermore, each employee has to pay contributions to accident insurance and the occupational old age scheme.

...apply income tax rates

Taxable income of a person subject to unlimited tax liability is subject to tax at a progressive rate (8-bracket schedule). The marginal rates, including the municipal surcharge, range from 3.5 % (for income exceeding the tax free allowance) to 28 %.

The schedules and tax free allowances differ for single taxpayers, single parents and jointly assessed married couples.

In case of limited tax liability a wage tax is levied (between 4 % to 19 %), unless there is a regular assessment (see below). In case of a regular assessment the same tax rate applies as for taxpayers subject to unlimited tax liability.

When and how do you pay?

Your employer deducts the amount of tax due from your salary on a monthly basis (wage tax withholding) and remits this amount to the Fiscal Authority on your behalf.

Taxpayers subject to unlimited tax liability receive a tax return form and are requested to file it usually by the middle of April of the calendar year following the respective tax year. The wealth and income of husband and wife are aggregated for tax purposes. However, married couples may, upon joint application, be assessed separately.

In the assessment, the Fiscal Authority specifies the tax assessment basis, the tax rate and the amount of tax due. The tax due is reduced by wage tax withheld and remitted by the employer. The balance is payable within 30 days from receipt of the assessment. If the taxpayer leaves the country, the tax must be paid at the latest on the date of relocation.

Taxpayers subject to limited tax liability with income exceeding CHF 150,000 have to file tax returns and are regularly assessed by the Fiscal Authority. For taxpayers subject to limited tax liability with income of CHF 150,000 or less the personal income tax is generally covered by the wage tax withheld and remitted by the employer. However, upon application such taxpayers can opt for a regular assessment; in this case the taxpayers have to file a tax return.

How to appeal/complain

If you disagree with your tax assessment, you can file a written appeal to the Fiscal Authority within 30 days from receipt of the assessment. If you disagree with the objection decision of the Fiscal Authority you may subsequently appeal to the National Tax Commission within 30 days of service of the objection decision. A decision of the National Tax Commission can be appealed to the Administrative Court within 30 days of service.

Links

Ministry for General Government Affairs and Finance Deutsch

I'm self-employed

Which income will be taxed in Liechtenstein?

  • Live in Liechtenstein (min. 6 months in the tax year)?
    You are considered to be tax resident in Liechtenstein and you are subject to unlimited tax liability on your worldwide wealth and income.
  • Lived in Liechtenstein but less than 6 months in the tax year?
    You are not considered to be tax resident in Liechtenstein and you are only subject to limited tax liability on your wealth and income from Liechtenstein sources, including income from employment pursued in Liechtenstein.
  • Income from other EEA-/EU-countries?
    If your wealth or income are also taxed in another country, this could lead to double taxation. The Double Taxation Agreements of Liechtenstein provide rules for the avoidance of double taxation (list of all Liechtenstein Double Taxation Agreements).

How much will you pay?

Take your salary...

Income earned from self-employment includes business and professional income.

...deduct eligible costs...

Costs directly related to business and professional income are deductible, e.g. all professional expenses, such as costs for material and goods, wages and social security expenses for employees, patent and licence fees, commercially justified write-downs, and all other expenses due to the business as well as adequate interest that would be paid on the own capital employed in the business in the amount of the nominal income. Certain personal deductions, e.g. for a child, for education of children, medical expenses, are allowed.

Income from self-employment is subject to social security contributions to old age, survivors’ and disability insurance, the family compensation fund as well as administration costs. The rate of the contributions is 11.6704 % of the gross income. A health insurance is mandatory for all residents. Furthermore, each self-employed person has to pay contributions to accident insurance and the occupational old age scheme.

...apply income tax rates

Taxable income of a person subject to unlimited tax liability is subject to tax at a progressive rate (8-bracket schedule). The marginal rates, including the municipal surcharge, range from 3.5 % (for income exceeding the tax free allowance) to 28 %.

The schedules and tax free allowances differ for single taxpayers, single parents and jointly assessed married couples.

In case of limited tax liability, the tax rate is 4 %, including the municipal surcharge (simplified assessment), unless there is a regular assessment (see below). In a regular assessment the same tax rate applies as for taxpayers subject to unlimited tax liability.

When and how do you pay?

Taxpayers subject to unlimited tax liability receive a tax return form and are requested to file it usually by the middle of April of the calendar year following the respective tax year. The wealth and income of husband and wife are aggregated for tax purposes. However, married couples may, upon joint application, be assessed separately. Taxpayers subject to limited tax liability have to get the tax return forms from the Fiscal Authority.

Taxpayers subject to limited tax liability also receive a tax return. For income of CHF 150,000 or less the taxpayer can choose between simplified and regular assessment. For income exceeding CHF 150,000 taxpayers have to file tax returns and are regularly assessed.

In the assessment, the Fiscal Authority specifies the tax assessment basis, the tax rate and the amount of tax due. The balance is payable within 30 days from receipt of the assessment. If the taxpayer leaves the country, the tax must be paid at the latest on the date of relocation.

How to appeal/complain

If you disagree with your tax assessment, you can file a written appeal to the Fiscal Authority within 30 days from receipt of the assessment. If you disagree with the objection decision of the Fiscal Authority you may subsequently appeal to the National Tax Commission within 30 days of service of the objection decision. A decision of the National Tax Commission can be appealed to the Administrative Court within 30 days of service.

Links

Ministry for General Government Affairs and Finance Deutsch

Contact points

Fiscal Authority of the Principality of Liechtenstein Deutsch

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