Liechtenstein tax law includes the following principal taxes:
• wealth tax;
• income tax;
• corporation taxes;
• capital and profit tax;
• special corporation tax;
• dividend tax (coupon tax);
• property transfer tax;
• inheritance tax;
• car tax;
• value added tax (VAT);
• stamp duty.
Natural persons residing in the country are subject to a progressive wealth and income tax. Capital yields such as interest, rent, dividends, etc. are tax-free but capital gains fall under the wealth and income tax. The maximum rate payable under this tax is 17%.
In principle, all companies or enterprises which carry on any trade or business conducted on commercial lines in Liechtenstein itself (onshore companies) are subject to capital and profits tax.
The basis of capital tax is the paid up ordinary or contributed capital, plus the accumulated reserves. The rate of tax is two per thousand of the taxable capital at the end of the financial year. An increase in capital (either by legal increase of capital or by an increase in reserves) during the year is not subject to tax in the year in which the increase took place.
Profits tax is calculated on the net income of the business year, including capital and liquidation profits. Taxes paid are deductible from the net yield. The rate of profits tax is equal to half of the percentage that the net yield accounts for as a percentage of the taxable capital, but is a minimum of 7.5% and a maximum of 15% of the net profit. The profits tax rate is subject to an increase of between 1-5% if the dividend payments of the company exceed 8% of the taxable capital. The highest increase of 5% applies if payment exceeds 24% of the taxable capital.
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