Switzerland

The tax agreement between Austria and Liechtenstein 

The tax agreement between Austria and Liechtenstein was signed on 29 January 2013 and is based on the agreement between Austria and Switzerland but has a significantly broader scope. The aim of this agreement includes the taxation of previously untaxed assets and also ensuring the future taxation of investment income and capital gains. The agreement will most likely enter into force on 1 January 2014.

What are the basic elements of tax agreement between Austria and Liechtenstein?

The tax agreement encompasses not only individuals resident in Austria who directly hold assets at a Liechtenstein paying agent, but also those who indirectly hold assets at a Liechtenstein paying agent, for example via a foundation or a trust in which they are beneficial owners. Furthermore, the scope is even broader as not only assets with banks in Liechtenstein are covered but also assets administrated through Liechtenstein wealth management structures held with banks in third states.

 

The tax agreement between Austria and Liechtenstein contains, in particular, rules on the following topics:

 

  • Regularisation of the past by levying an anonymous one-off payment in the range of 15% to 38% of the relevant capital or by disclosure to the responsible Austrian authority. On the right you find a tool to calculate the one-off payment for the regularisation of the past.
  • Ensuring the taxation of future investment income and capital gains by levying a final withholding tax of 25% or disclosure to the responsible Austrian authority.
  • Taxation of contributions into non-transparent foundations and of distributions of such foundations to beneficiaries.

 

Despite the tax agreement, Austrian clients may still file a voluntary disclosure in Austria for regularising their past tax liabilities.

What are your challenges?

The tax agreement between Austria will most likely enter into force in less than a year. Therefore, the Liechtenstein banks and fiduciaries should initiate immediately the implementation of the agreement. The Liechtenstein banks and fiduciaries should as soon as possible identify the affected Austrian clients and inform these clients about the tax agreement. Only by beginning of the implementation, there will be enough time to analyse the impact on the clients and involved banks/fiduciaries and the respective alternatives. Simultaneously, for each client it has to be analysed whether a voluntary disclosure would be more advantageous or whether the bank client should wait for the regularisation within the framework of the agreements.

How can KPMG support you?

KPMG can support both, banks/fiduciaries as well their clients, with the various issues; in particular with the implementation of the agreement. Selected experts from our experienced banking team are available to support you particularly through the following services:

 

  • Client identification (In-House) Training of bank employees/ Information of bank clients
  • Voluntary disclosure Individual comparative calculation to assess advantages of alternatives
  • Support in connection with amendments on IT infrastructure Preparation of tax reporting
  • Review tools for correct application of the treaties ("certification")
  • Calculation of the one-off payment and the final withholding tax

Jürg Birri

Jürg Birri

Partner, Head of Legal German Switzerland

+41 58 249 35 48

Philipp Zünd

Philipp Zünd

Manager, Attorney-at-Law

+41 58 249 42 31

Your tax burden?

Your tax burden?

Calculate the one-off payment for the regularization of the past with our Online Tool.