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Liechtenstein: Domestic Corporate Taxation

Corporate Income Tax

The Tax Act 2010, in force since January 1, 2011, provides that Corporate Income Tax is levied on taxable net corporate income at a basic rate of 12.5% (at the time of writing). This applies to all legal persons who are domiciled and have their effective place of management in Liechtenstein.

The information below describes how companies were taxed prior to the new Tax Act:

X = (Taxable Income x 100) / (Taxable Capital x 2).

(See below under Calculation of Taxable Base for the definitions of Taxable Income and Taxable Capital). It will be evident that a reasonably profitable company always qualified for the maximum rate.

In addition, if dividend distribution exceeded 8% of Taxable Capital (same definition) there was a surcharge of up to 5% of Taxable Income in the year in which the dividend was declared, as follows:

Dividend as % of Taxable Capital
Profits Tax Surcharge, %
> 8 up to 10
1.0
> 10 up to 12
1.5
> 12 up to 14
2.0
> 14 up to 16
2.5
> 16 up to 18
3.0
> 18 up to 20
3.5
> 20 up to 22
4.0
> 22 up to 24
4.5
> 24
5.0

Thus, the maximum rate of profits tax was 20%, likely to be incurred by a company which made a decent profit without much capital employed.

 

 

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