Who is liable to pay tax?

According to Art. 10 MWSTG, anyone who operates a business even without the intention of making a profit and irrespective of its legal form and purpose, and provides services in the domestic market with this business or has a registered office, place of residence or permanent establishment in Liechtenstein is liable to pay tax.

A company is operated by anyone who independently carries out a professional or commercial activity aimed at the sustained generation of income from services and who appears to the outside world under his own name.

In particular, natural persons (sole proprietorships), partnerships (such as general and limited partnerships), legal entities under private and public law, dependent public institutions, as well as groups of persons without legal capacity, which - such as joint ventures active in the construction industry - transact business under a common name, may be subject to taxation.

Exemption from tax liability

In principle, anyone who generates less than 100,000 Swiss francs in turnover within a year in domestic and abroad from services that are not exempt from tax under Art. 21 para. 2 MWSTG.

Also exempt from tax liability is anyone who has their registered office, domicile or permanent establishment in Liechtenstein and exclusively provides services abroad.

The only exceptions to the above limit of 100,000 Swiss francs relate to non-profit sports or cultural associations and charitable institutions, for which a limit of 250,000 Swiss francs applies.

Further exempt from taxation is anyone who operates a business domiciled abroad that provides exclusively one or more of the following types of services in the domestic market, irrespective of turnover:

1.  services exempt from tax,
2.  Services whose place of supply is within the territory of the country pursuant to Article 8(1) of the VAT Act; however, a person who supplies telecommunications or electronic services to non-taxable recipients is not exempt from taxation,
3.  Supply of electricity in lines, gas through the natural gas distribution network and district heating to taxable persons in the country.

Based on the VAT Ordinance, companies that provide services in the domestic market exclusively exempt from tax may waive registration as a taxable person.

Purchase of services from companies based abroad

Whoever is not already liable to pay tax under Art. 10 MWSTG also becomes liable to pay tax if he or she receives services or supplies subject to the purchase tax for more than 10,000 Swiss francs in a calendar year.

Subject to the purchase tax:

• Services whose place of supply is in domestic pursuant to Art. 8 para. 1 VAT Act and which are provided by companies established abroad that are not entered in the register of taxable persons, with the exception of telecommunications or electronic services to non-taxable recipients;
• the import of data carriers without market value with the services and rights contained therein (is not subject to import tax if no market value can be determined in accordance with Article 52 para 2 of the CH-MWSTG);
• the supply of immovable property within the domestic market, which is not subject to import tax and which is provided by companies established abroad, which are not entered in the register of taxable persons, with the exception of the transfer of such property for use or enjoyment;
• the supply of electricity in lines, gas through the natural gas distribution network and district heating by enterprises established abroad to taxable persons in the domestic territory;

For those service recipients who are not already liable to tax under Art. 10 MWSTG, the tax liability under Art. 45 MWSTG is limited to the purchase of such services.

Persons who are already liable to pay tax have to account for each purchase.

Begin and end of the tax liability

In principle, the tax liability begins with the commencement of the entrepreneurial activity and ends with its termination. Once the entrepreneurial activity has commenced and the company has been entered in the VAT register, it can be exempted from tax liability if it no longer reaches the relevant turnover limit and it is to be expected that it will not reach it in the subsequent tax period either. In this case, it must inform the Fiscal Authority in writing; otherwise, it is assumed that it waives the exemption from tax liability (voluntary tax liability).

For foreign companies, the tax liability begins when a service is provided in the country for the first time and ends at the end of the calendar year in which a service is provided in the country for the last time.

Duty of registration

Whoever fulfills the requirements of the tax obligation must register in writing with the Liechtenstein Fiscal Authority within 30 days of fulfilling the requirements, without being requested to do so.

The registration is made using the questionnaire for clarification of VAT liability

Note for companies based abroad (outside FL and CH):

The questionnaire for registration as a VAT payer for foreign companies is available at the following link Questionnaire for registration as a VAT payer for foreign companies.