Liechtenstein

Anti-avoidance rules for dividend income and capital gains

The anti-avoidance rules on dividend income and capital gains apply as follows:

• Dividend income and capital gains deriving from investments in foreign legal entities are not tax-exempt for income tax purposes if more than 50% of the total income of the foreign legal entity consists of passive income and its taxable income is subject, directly or indirectly, to low taxation.
• For participations owned before 1 January 2019, the anti-avoidance rules did not apply if a dividend income or capital gain was realised before 31 December 2021. As of 1 January 2022, regular anti-avoidance rules apply to such participations.

Organisation for Economic Co-operation and Development (OECD) Global Minimum Tax

Following its approval by the Liechtenstein parliament on 10 November 2023, the Liechtenstein government enacted the Global Anti-Base Erosion (GloBE) Law (i.e. global minimum tax) on 22 December 2023 to enter into force as of 1 January 2024. As such, Liechtenstein groups and companies within the threshold of global minimum tax will be subject to a Qualified Domestic Minimum Top-up Tax (QDMTT) and Income Inclusion Rule (IIR) of 15% for tax years starting on or after 1 January 2024.

The effective date of the Undertaxed Payments Rule (UTPR) is to be defined separately through a second ordinance and can only enter into force on 1 January 2025 at the earliest. As such, it remains open when UTPR may be introduced.

Generally, the Liechtenstein GloBE Tax Law follows the OECD model rules. Beside multinational enterprises with gross revenue of more than 750 million euros (EUR), in analogy to the European Union (EU) Council Directive, pure domestic Liechtenstein groups exceeding the revenue threshold will also fall under the GloBE Tax Law. Not only do corporate vehicles fall under the definition of multinational enterprises, but also trusts, foundations, and establishments. This means that any Liechtenstein corporate or legal vehicle of any form should assess whether it falls under the new GloBE Tax Law starting 1 January 2024.