Liechtenstein is one of the most prolific financial centers in Europe and many foreign investors set up companies in various industries here. In order to help these investors to repatriate profits as easy as possible and with the least possible impact on the taxes they pay, Liechtenstein has signed numerous double taxation treaties.
In 2009 Liechtenstein signed a double taxation agreement with Luxembourg. The treaty was enforced in stages, as it follows:
Our company formation agents in Liechtenstein can offer information on all the Principality’s double taxation treaties.
The agreement for the avoidance of double taxation between Liechtenstein and Luxembourg provides for the following taxes:
The tax treaty also covers similar taxes imposed in Liechtenstein and Luxembourg.
Another important provision of the Liechtenstein – Luxembourg double tax treaty covers permanent establishments of companies registered in the contracting states which carry out operations in the other country for a minimum period of 12 months. The incomes of these entities will be taxed in the country where the activities are undertaken. This is the of branch offices registered by companies in one country in the other state.
You can rely on our company registration consultants in Liechtenstein if you want to open a branch office here.
The double tax treaty between Liechtenstein and Luxembourg also provides to the avoidance of double taxation of income earned by company directors, sportsmen and professors.
The avoidance of double taxation in Luxembourg will occur through the tax credit and exemption methods. With respect to Liechtenstein, double taxation will be avoided through the same methods. It should be noted that the means of avoidance of double taxation will depend on the type of income.
The Liechtenstein – Luxembourg double taxation treaty also provides for the following reduced tax rates:
Our company registration advisors can explain the taxation system in Liechtenstein.
Most of Liechtenstein’s double taxation treaties which were renewed in the past few years contain provisions related to the exchange of tax information. This is because the Liechtenstein government has amended the country’s fiscal policy in order to provide for more tax transparency.
The amended double taxation agreement with Luxembourg follows the same model created by the OECD and provides for the exchange of tax information between the two states. The clause is very important considering both countries are among the best known financial centers in Europe.
Until recently Liechtenstein was in a grey area when it came to tax transparency, however the government has started amending its tax conventions in order to enhance the taxation system. Officials have also announced that Liechtenstein is ready to sign agreements which provide solely for exchange of tax information.
For full information on the double tax treaty with Luxembourg, please contact our company formation representatives in Liechtenstein.