CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. Liechtenstein Tax Rises Deemed 'Unavoidable'

Liechtenstein Tax Rises Deemed 'Unavoidable'

by Ulrika Lomas,, Brussels

22 November 2012

Liechtenstein Prime Minister Klaus Tschütscher has recently held talks with representatives of the Principality’s industry, employee and banking associations, with the discussions focusing on additional expenditure- and revenue-based measures needed to reduce the deficit by CHF52m (USD55m) by the end of 2016.

According to the Liechtenstein government, although the associations concerned underlined the need for further savings measures to be examined before significant tax rises are introduced, all were united in their agreement that tax rises are unavoidable.

During the course of the meeting, Tschütscher underscored that the government has a legal obligation anchored in the budget law to present to parliament in May 2013 a report outlining the various initiatives that should be implemented in Liechtenstein to eradicate the CHF52m deficit by the end of 2016.

In order for the new government to be able to submit this report to lawmakers in a timely manner, the necessary preparations must be made in this legislative period, the course must be set, and the reports drafted, Tschütscher explained.

Both Tschütscher and the associations present agreed that revenue measures would be implemented that have already been approved by the government, and provided for within the framework of the government’s bill aimed at amending the existing tax law.

Initially unveiled back in September in the form of a draft consultation report, the bill provides for measures aimed at increasing tax revenues in Liechtenstein and is due to be examined by parliament in December.

The bill provides an increase in wealth and individual income tax, by adjusting the lower and middle tariffs in such a way as to ensure that the tax burden is the same as under the country’s old tax law. In addition, the introduction of an additional 8% tax rate has been agreed, together with plans to increase the endowment tax rate.

The bill also provides that no loss carry-forwards are generated by own-capital interest deductions and that the loss carry-forward allocation is limited.

Those present agreed unanimously that these measures are insufficient in themselves, and stressed that further measures must be taken, emphasizing that redressing the state budget is a fundamental and urgent requirement.

Consequently, a joint project group, comprising representatives of the associations and the government, was set up. The group is due to draft a report by mid-February 2013, advocating which additional fiscal initiatives should be taken to consolidate the budget by the required CHF52m.

TAGS: tax | law | banking | budget | Liechtenstein | offshore | individual income tax

To see today's news, click here.


Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »

Stay Updated

Please enter your email address to join the mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.

To manage your mailing list preferences, please click here »