Tax laws in Liechtenstein are simple, internationally compatible and in line with European legislation. Attractive tax rates are one of but not the only advantage enjoyed by companies based in the Principality. The simple design of the tax system makes it easy to use and eliminates complex procedures.
Companies in Liechtenstein are subject to income tax and property gains tax. A flat tax is used in order to keep the tax system very simple. It is also possible to fill in and submit the annual tax declaration online.
Companies in Liechtenstein pay income tax at a flat rate of 12.5%. There is a minimum income tax of CHF 1800 per year. Dividends and capital gains from investments as well as income from companies and property outside Liechtenstein are not included. A pre-determined proportion of equity returns can also be deducted from income tax. Article 44ff of the Liechtenstein Tax Act contains all provisions on income tax.
If an area of land in Liechtenstein is sold or changes owner then the profit resulting from this transaction is taxed. This property gains tax must be paid by both individuals and companies. Article 35ff of the Liechtenstein Tax Act contains detailed provisions on property gains tax.
Thanks to the customs union with Switzerland, Liechtenstein shares the same low rate of Value Added Tax (8%). The term "inland" in the Value Added Tax Act refers to the territory of both Liechtenstein and Switzerland. The provisions concerning VAT are almost identical in both countries.