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The Switzerland – Liechtenstein Double Tax Treaty

The Switzerland – Liechtenstein Double Tax Treaty

Liechtenstein and Switzerland have signed a new double tax treaty (DTA), which became effective starting with 2017, that replaced the previous one from 1995. According to the provisions of the new treaty, foreign investors in Liechtenstein from Switzerland and vice versa will benefit from preferential withholding taxes and will be able to offset the payment of some profits taxes from one jurisdiction to the other. Our lawyers in Liechtenstein detail the provisions of this agreement. 

Liechtenstein – Switzerland DTA

The double tax treaty between Liechtenstein and Switzerland applies on the taxes on income and capital levied by both jurisdictions. The agreement allows investors who are residents of one jurisdiction to offset the taxes on income imposed by the other jurisdiction for their income derived from their establishment there. Branches in Liechtenstein are an example of business structures that can benefit from this agreement. 

Investors in Liechtenstein from Switzerland and vice versa thus benefit from a more attractive taxation regime. Moreover, according to the new double tax treaty, the withholding tax on interest payments will have a zero percent value. The withholding tax for dividends will have a maximum value of 15 percent and  special exemptions will be in place for dividend payments (in respect to pension funds and beneficial owners).

Liechtenstein has also updated a number of double tax treaties with other countries. The country has signed more than 15 such treaties. One of our lawyers in Liechtenstein can give you detailed information on the existing treaties.

Taxation in Liechtenstein

Companies in Liechtenstein are taxed based on their residence: corporations that have their place of effective management in Liechtenstein are considered tax residents and the taxes are levied on the worldwide income. Profits derived from foreign branches are exempt from worldwide taxation.

Our attorneys in Liechtenstein can give you complete information on the tax laws and how they apply to your type of business.

Contact our law firm in Liechtenstein for more information on taxation in the country.