With close economic ties, Liechtenstein and Switzerland have finally amended their double taxation agreement at the end of 2016. On January 1st, 2017, the agreement became effective in both countries. For Liechtenstein, this treaty is more important than ever, considering the influx of Swiss investors and employees during the last several years. Our company formation agents in Liechtenstein can offer information about other double tax treaties the Principality signed to foreign investors interested in opening companies here.
The first double tax treaty Liechtenstein signed with Switzerland dates back in 1995. From an economic point of view many things have changed and the most important one is the protocol for exchange of tax information which more and more countries include. Also, the first double tax treaty the two countries signed was a limited one, providing for the avoidance of double taxation of certain incomes.
The new double tax agreement between Liechtenstein and Switzerland was signed in 2015 enforced at the end of 2016 and became effective at the beginning of 2017. The new treaty covers more taxes, among which the taxation of pension funds, cross-border employees and shareholders in holding companies.
Our company registration consultants can assist foreign investors interested in opening holding companies in Liechtenstein.
One of the greatest advantages of the double tax treaty between Liechtenstein and Switzerland is the withholding tax on interest payments which is now zero. Dividend payments will also benefit from a new tax rate of maximum 15%, however in the case of beneficiaries owning at least 10% in a holding company in Liechtenstein the dividends are exempt from the withholding tax. Pension funds will also be exempt from taxation under the new agreement. Employees commuting from one state to another will be taxed in their home country. However, if they stay in the other country for more than 45 days in a calendar year, they will not be considered commuters.
For full information on the new provisions of the double taxation treaty with Switzerland, please contact our Liechtenstein company formation representatives. We also offer company registration services in Liechtenstein.