Effective Tax Rate on Rental Income
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Nonresidents are taxed on their income from Liechtenstein sources. Liechtenstein asset and income tax law is governed by the principle of family taxation, which means that married couples are assessed and taxed jointly.
Taxes are assessed on the basis of taxable assets and taxable income. The tax rate is determined annually by Parliament in fractions or multiples of the legal tax unit (0.1% for taxable assets, 2% for taxable earnings); it is currently 54% of the legal tax unit.
Tax progression surcharges of 5% to 425% are added to the simple national tax, i.e., the amount of asset and income tax calculated on the basis of the tax rates mentioned above, depending on the amount of the tax. Municipalities add additional surcharges of at most 200% to the overall national tax liability.
Assuming a municipal tax surcharge of 200%, the minimum and maximum tax rates are as follows: at least 0.162% and at most 0.8505% for asset tax; at least 3.24% and at most 17.01% for income tax.
Gains or profits realized from the sale of Liechtenstein property are subject to a special tax called real estate profits tax. Taxable gains or profits are computed by deducting the investment costs (acquisition costs and improvement costs) from the sales proceeds.
Gains or profits are taxed at progressive rates, from 0% on property values up to CHF15,000 (€14,286) to 0.70% on property values in excess of CHF170,000 (€161,905).
Community surcharge is charged at 200% of the property tax.
The net worth tax is levied on the net worth of the taxpayer’s assets. Net wealth is multiplied by 4% to calculate notional income from wealth, which is then subject to income tax at progressive rates.
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