Restructurings (e.g. change of corporate form, merger, spin-off) can be carried out tax neutrally, provided certain conditions are met.
All restructurings have in common that they can only be carried out tax neutrally if they are performed at tax book value and if the assets remain taxable within Liechtenstein. Furthermore, specific/additional conditions must be met for each kind of restructuring.
Foreign Account Tax Compliance Act (FATCA)
A Model 1 intergovernmental agreement (IGA) for the implementation of FATCA was signed between the governments of Liechtenstein and the United States on 16 May 2014.
Under the Model 1 IGA, Liechtenstein financial institutions will be required to report to local tax authorities on the accounts of US citizens. The Liechtenstein tax authorities will then send the tax information to the US Internal Revenue Service (IRS).
Automatic information exchange
Liechtenstein, inter alia, has committed to implement the Common Reporting Standard (CRS) for automatic exchange of tax information, which the G20 Finance Ministers endorsed on 23 February 2014. Accordingly, Liechtenstein belongs to the group of early adopters leading to the first automatic information exchanges in 2017 for the year 2016. The Liechtenstein Parliament passed the law on the automatic exchange of information (AIA law), with various amendments to the Liechtenstein Tax Act, on 6 November 2015. The AIA law corresponds mainly with the OECD CRS and shall introduce a uniform standard for exchanging tax information with tax authorities of other countries. The AIA law entered into force on 1 January 2016.
EU Mandatory Disclosure Rules (DAC6)
In order to detect cross-border, potentially aggressive tax arrangements, the European Union has introduced a new tax transparency directive 2018/822 (DAC6), which may also have far-reaching consequences for companies or individuals based outside the European Union. DAC6 imposes mandatory disclosure requirements for certain arrangements with an EU cross-border element where the arrangements fall within certain 'hallmarks' mentioned in the directive and in certain instances where the main or expected benefit of the arrangement is tax advantage.
Liechtenstein is a member of the European Economic Area but not of the European Union. As the European Economic Area does not include the common tax policy, DAC6 is, as such, not binding for Liechtenstein. There is currently no voluntary adaption of the DAC6 regulation planned in Liechtenstein. Hence, the DAC6 mandatory disclosure rule is not applicable for Liechtenstein intermediaries and companies. Nevertheless, these rules have far reaching impacts also for Liechtenstein-based intermediaries and companies as reporting may be required by the EU-based contracting parties of a transaction and with that also discloses Liechtenstein-related transactions and information.
Liechtenstein-based intermediaries and companies with cross-border transactions with the European Union should review, in any case, whether the involved EU-based counter-party may need to disclose a transaction.