Inheritance tax in Liechtenstein
In the Principality of Liechtenstein is from the acquisition of testamentary inheritance tax both as estate tax as well as inheritance tax levied unrequited transfers inter vivos also falls gift tax on. From January 1, 2011, gifts are no longer subject to gift tax. Deaths with a legally effective certificate of responsibility after January 1, 2011 are no longer subject to estate and inheritance tax.
Tax liability
The collection of estate, inheritance and gift tax is regulated in Art. 89 ff. Of the Act on State and Municipal Taxes (Tax Act) of January 30, 1961. With the estate tax, the estate is taxed directly, with the inheritance tax or gift tax, the amount incurred by the purchaser. Estate and inheritance tax are levied together. All three types of tax are always subject to real estate located in the country as well as transfers of assets as a result of death or donation in which the testator or donor had or is domiciled in Liechtenstein. This also applies to assets located abroad, with the exception of the properties, businesses or permanent establishments located there. The estate tax is subject to a deduction even if the official composition proceedings ( probate proceedings ) was carried out in Liechtenstein. An acquirer is subject to unlimited taxation with regard to inheritance or gift tax even if the testator or donor was or has his residence abroad, but the acquirer himself lives in Liechtenstein. If, however, in this case the purchaser provides evidence that he has to pay foreign inheritance or gift tax on his acquisition, he is exempt from Liechtenstein tax. The purchaser is liable to pay the tax for all three types of tax; the donor is jointly and severally liable for gift tax.
Estate
For all three types of tax, the estate is valued according to the market value. The assessment is carried out by the tax office (Art. 103 Paragraph 1, 100 and 44 Tax Act). Estate debts are deducted insofar as they relate to the taxable estate (e.g. not in the case of liabilities encumbering foreign land), as are property rights obligations towards the surviving spouse that have to be fulfilled on the occasion of death. To secure the tax claim, an inventory is drawn up within eight days of death by a delegation from the municipal council of the municipality in which the deceased was liable for tax, for which a fee of 2 ‰ of the net worth is charged. If there is a risk that parts of the property will be removed before the municipal inventory takes place, the entire estate can be sealed (Art. 101 Para. 3 Tax Act).
Tax exemptions
The sovereign, together with the members of the Princely House, is exempt from all three types of tax (Art. 93 lit. a and Art. 94 Tax Act). The state and all institutions as well as the municipalities are exempt from inheritance and gift tax, but not from estate tax, insofar as the donations serve the fulfillment of municipal tasks, as well as non-profit institutions. Spouses and descendants are exempted up to CHF 10,000 as well as commodities up to a value of CHF 2,000 if they were acquired by descendants, spouses, parents, siblings or servants who lived in the same household as the deceased. Also, regardless of their value, works of art, antiques and collections of artistic interest or with a collector's value that have been in family ownership for at least ten years and belong to persons with domestic residence (Art. 95, Paragraph 1 Tax Act). For the purpose of gift tax, gifts, insofar as maximum amounts are provided for them, are added together within ten years (Art. 95 (2) Tax Act).
Estate tax
In the case of estate tax, the spouses, children and parents of the deceased form a separate group vis-à-vis all other persons, who only have to pay half of the prescribed tax rates. The rates resulting from the following table apply, which are charged within the value group (progressive partial tariff).
| Taxable assets | Spouses, children, etc. a. | all other |
|---|---|---|
| up to CHF 200,000 | 0.5% | 1 % |
| 200,000 - 600,000 francs | 1 % | 2% |
| 600,000 - 1.2 million francs | 1.5% | 3% |
| CHF 1.2 million - CHF 2 million | 2 % | 4% |
| over 2 million francs | 2.5% | 5% |
Inheritance and gift tax
The following six tax classes are formed for inheritance and gift tax:
- Tax class I: spouses, children (including adopted children), grandchildren and parents
- Tax class II: grandparents and siblings
- Tax class III: in-laws and stepchildren, nephews and nieces
- Tax class IV: uncles and aunts
- Tax class V: other blood relatives and related parties up to the second degree
- Tax class VI: all other persons
In relation to the mother, illegitimate children are equal to legitimate children, in relation to the father only if paternity has been recognized by the father or determined by a court (Art. 97 (2) Tax Act).
According to Art. 97 Tax Act, a linear tariff applies to each group. Art. 98 Tax Act is increased by progressively increasing surcharges (increasing from 1/10 by 1/10 up to 5/10) from a value of 20,000 francs. The straight-line rate is also increased by 50% if, within the tax groups I to V formed according to the degree of kinship, an acquirer receives more than he would be entitled to according to the legal succession (Art. 97 Para. 3 Tax Act). The tax rates are also charged here within the respective value group and the resulting tax amounts are added (progressive partial tariff), as shown in the table below.
| Taxable assets | Class I / over-inheritance | Class II / over-inheritance | Class III / over-inheritance | Class IV / over-inheritance | Class V / over-inheritance | Class VI |
|---|---|---|---|---|---|---|
| up to 20,000 francs | 0.5 % / 0.75% | 2 % / 3 % | 5 % / 7.5 % | 9 % / 13.5 % | 12 % / 18 % | 18 % |
| 40,000 - 70,000 francs | 0.55% / 0.83% | 2.2% / 3.3% | 5.5% / 8.25% | 9.9% / 14.85% | 13.2% / 19.8% | 19.8% |
| 70,000 - 170,000 francs | 0.6 % / 0.9 % | 2.4% / 3.6% | 6 % / 9 % | 10.8% / 16.2 % | 14.4% / 21.6% | 21.6% |
| 170,000 - 370,000 francs | 0.65% / 0.98% | 2.6% / 3.9% | 6.5% / 9.75% | 11.7% / 17.55% | 15.6% / 23.4% | 23.4% |
| 370,000 - 770,000 francs | 0.7 % / 1.05% | 2.8% / 4.2% | 7 % / 10.5 % | 12.6% / 18.9 % | 16.8% / 25.2% | 25.2% |
| over 770,000 francs | 0.75% / 3 % | 3 % / 4.5% | 7.5% / 11.25% | 31.5% / 20.25% | 18 % / 27 % | 27 % |
Repeated inheritance
If a testator bequeaths property to his children that he inherited or was given to him within five years before his death, half of the tax paid by the testator can be offset against the tax now payable by the children. If the period in between is longer, but not more than ten years, the tax paid by the testator can be offset by a quarter (Art. 99 Tax Act).
Procedure
The acquirer must notify the tax administration of the inheritance or donation within 14 days. The tax must be paid before the estate is distributed, it is distributed beforehand, then all heirs, limited to their inheritance share, are jointly and severally liable for the tax (Art. 91 (2) Tax Act).
Double taxation and international inheritance tax law
So far, Liechtenstein has only concluded double taxation agreements with Switzerland , Austria and, in 2009, with Luxembourg , of which the existing agreement with Austria also includes inheritance tax. Otherwise, Liechtenstein avoids double taxation by, on the one hand, not taxing real estate and permanent establishments located abroad from the outset and, on the other hand, exempting the acquisition by domestic persons from tax in the case of testators or donors who are not resident in Liechtenstein if they can prove that they were taxed abroad ( Art. 90 Para. 4 Tax Act).
See also
Individual evidence
- ↑ Internet site of the State Administration of the Principality of Liechtenstein, accessed on February 6, 2014, archive link ( Memento of the original from February 22, 2014 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
- ↑ Liechtensteinisches Landesgesetzblatt 1961 No. 7, 640, of March 30, 1961, accessed on August 31, 2009, Liechtenstein Tax Act
- ↑ Art. 90 Paragraph 1 - 4 Tax Act; Troll-Gebel-Jülicher: Inheritance Tax and Gift Tax Act , loose-leaf commentary, 37th edition 2009, Vahlen, ISBN 978-3-8006-2402-7 , § 21 ErbStG marginal no. 113 (Liechtstein)
- ↑ Art. 96 Tax Law, Tax Law Liechtenstein
- ↑ Art. 97 and 98 Tax Act, Tax Act Liechtenstein
- ^ Page of the Landesverwaltung Fürstentum Liechtenstein, double taxation agreement with Luxembourg, accessed on August 31, 2009, [1] ( page no longer available , search in web archives ) Info: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice.
- ^ Page of the Landesverwaltung Fürstentum Liechtenstein, Steuerrecht, page 159ff., Accessed on August 31, 2009, [2] ( page no longer available , search in web archives ) Info: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice.
literature
- Troll-Gebel-Jülicher: Inheritance Tax and Gift Tax Act , loose-leaf commentary, 37th edition 2009, Vahlen, ISBN 978-3-8006-2402-7 , § 21 ErbStG marginal no. 113 (Liechtstein)
- Rembert Süß: Inheritance law in Liechtenstein , in: Rembert Süß (Ed.): Inheritance law in Europe , Zerb-Verlag 2nd edition 2008, ISBN 978-3-935079-57-0 , pages 965–968
