Liechtenstein: Consultation draft for implementation of Pillar Two global minimum tax

A consultation draft for implementation of the OECD’s Pillar Two global minimum tax of 15%

A consultation draft for implementation of the OECD’s Pillar Two global minimum tax of 15%

The government of Liechtenstein prepared a consultation draft for implementation of the OECD’s Pillar Two global minimum tax of 15%.

The consultation period expired at the beginning of June 2023. The corresponding report and motion of the government is to be discussed in the Parliament in September 2023 and is expected to become effective in accordance with the harmonised approach of the EU as of 1 January 2024.

Key points for implementation of the global minimum tax include:

  • A supplementary tax as a qualified domestic minimum top-up tax (QDMTT) will be introduced effective 1 January 2024, along with an income inclusion rule (IIR) supplemental tax.
  • An undertaxed payments rule (UTPR) supplemental tax will subsequently be implemented beginning 1 January 2025.
  • The global minimum tax is also to be introduced for large domestic groups so as to comply with the ban on discrimination in the European Economic Area (EEA).
  • The Individual and Corporation Act with its supplementary accounting provisions as a generally accepted accounting standard of the EEA member state Liechtenstein will serve as a starting point for the global minimum tax for large domestic as well as multinational groups with a group parent company.
  • All legal entities, even foundations and trusts as well as partnerships as a business entity that are part of a multinational group of companies or a large domestic group, will be affected.
  • The application of transitional safe harbor rules as a relief for simplified calculation based on data from country-by-country (CbC) reporting will be allowed during a transition period of three fiscal years.
  • Further transitional arrangements for multinational groups in the early stages of their international operations will be provided for under the conditions set out in the GloBE model rules for five financial years. For large domestic groups, an exemption from the Liechtenstein supplementary tax will also be provided for during five business years from the first application of this law.

Read a June 2023 report prepared by the KPMG member firm in Switzerland


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