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Liechtenstein: Personal Taxation

Income Tax

Income tax is charged on gross income from employment, including any monetary benefits, wherever earned or paid. Capital gains are included in chargeable income.

Income from investments (eg dividends, royalties, rentals, interest) is exempt from income tax.

Some deductions from gross income are permitted, including deductions for out of pocket work-related expenses (subject to a cap); life, sickness and accident insurance premiums (capped per family member); pension contributions up to 12% of taxable income; social security contributions; higher education (subject to a cap); medical costs (capped per person); and personal allowances and capital gains allowance a per taxable person amount, depending on family circumstances.

Married couples are taxed jointly. The rate of income tax depends in a complex way on the level of taxable income, and the particular commune in which the tax-payer is resident, but rises to a maximum marginal rate of about 21%.

In addition, employees pay social security contributions of 4.55% of gross pay (2013). For the self-employed, the rate rises to a maximum of 11.6%.

Employment income is taxed at source through a monthly withholding tax applied by the employer, which additionally deals with social security contributions. All other types of income are declared on an annual tax return which is to be filed by late April (calendar year basis). Tax is due to be paid 30 days after receipt of an assessment.

Resident employees of non-resident employers are not subject to withholding arrangements, and pay tax 30 days after bills are received from the tax authorities.



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