The corporate earnings tax
Businesses based in Liechtenstein benefit from an attractive tax rate and are subject to corporate earnings tax and real estate capital gains tax. The simplicity of the tax system with its flat tax is clearly evident from the fact that statements can also be filed by electronic means.
Legal entities
Legal entities are subject to corporate earnings tax in Liechtenstein which is levied on the basis of what is called a flat tax rate of 12.5%. The corporate earnings tax is an annual tax and its bases for assessment are determined for each calendar year or tax year. The basis for calculation is the reported net income. In this respect, no dividends or capital gains from participations or income from permanent establishments or real estate located in a foreign country are taken into consideration. In addition, equity capital interest up to a fixed rate of 4%, entered in the books as an expenditure, thus reducing profit, can be deducted from the corporate earnings tax. Losses brought forward can be offset from previous years with no time limit. The minimum corporate earnings tax amounts to CHF 1,800 per year. No minimum corporate earnings tax is collected, if the balance sheet of a business has not exceeded 500,000 francs over the average of the last three financial years and if the purpose is exclusively to operate a business run along commercial lines.
The Tax Office will send a letter to legal entities at the beginning of a calendar year and ask them to file a tax return. The filing period for a year is 30 June of the following year. The tax return can be filled in completely by electronic means by e-Tax (German only), but a printout bearing the date and personal signature must be filed with the Tax Administration in good time.
Private asset structures or endowments of assets with no legal personality are not subject to corporate earnings tax and they only pay a minimum corporate earnings tax in the amount of CHF 1,800.
Sole proprietorship
The owner of a sole proprietorship is qualified under the Tax Act as a self-employed person. The income tax has no uniform tax rate but various tax brackets. The decisive criterion governing the question into which tax bracket the sole proprietor falls is whether he/she is single, a single parent or married or whether he/she is assessed together with the spouse. In addition, the income tax rate depends on the municipal tax surcharge which is different depending on the municipality, but which is between 150% and 250%. Just as individuals, sole proprietors are requested by the municipality at the beginning of a year to draw up their tax return for the previous calendar year. In this case, too, the tax return can be filled in completely by electronic means by e-Tax (German only), but a printout bearing the date and personal signature must be filed with the Municipal Tax Office in good time.