Employer Tax Contributions

Tax Type	Rate (Employer Share)	Base
AHV/IV	4.9% (total employer/employee 9.6%)	Gross Salary
FAK	1.9%	Gross Salary
ALV	0.5% (total employer/employee 1%)	Gross Salary (up to CHF 126,000 annually)
Administration Costs	0.2875%	Total AHV-IV-FAK Contribution

Filing & Compliance

• Monthly/Quarterly reporting and payment of withheld taxes and contributions are generally due by the 10th or 15th of the following month.
• Annual wage statements must be issued to employees and submitted to the Tax Administration.
• Corporate tax returns are typically due by July 1 of the calendar year following the fiscal year-end.

In Liechtenstein, employees are subject to income tax, wealth tax, and social security contributions, with various deductions and allowances available to reduce the overall tax burden.

Income Tax

• Progressive Tax Rates: Income tax rates are progressive, ranging from 1% to 8%, with an additional municipal surcharge (150% to 250% of the national tax) varying by municipality. Eight tax bands exist within this structure. For example, a married couple with two children earning CHF 200,000 annually might face an effective tax rate of approximately 6.5% after deductions and a 160% municipal surcharge. A single taxpayer with the same income might see an effective rate around 10.1% under similar conditions. As of 2025, the partial foreign tax liability is abolished, impacting expats previously under the 30% ruling, although transitional rights extend until the end of 2026.

• Withholding Tax: Employers withhold income tax directly from employee salaries and remit it to the tax authorities.

• Annual Tax Return: Employees must file an annual tax return to reconcile the withheld tax with the final tax liability based on the previous year's income.

Deductions and Allowances

• Employment Expenses: A standard deduction of CHF 1,500 (€1,500, as of 2025-02-05) is available for employment-related expenses (CHF 1,000 for travel and CHF 500 for education). Expenses exceeding this amount may also be deductible with proper documentation.

• Insurance Premiums: Premiums for life, sickness, and accident insurance are deductible up to CHF 3,500 for single individuals, CHF 7,000 for married couples, and CHF 2,100 per child.

• Pension Contributions: Contributions to pension funds are deductible up to 18% of the employee's annual income.

• Child Allowance: A deduction of CHF 12,000 per child is available. Note that changes in Italy regarding deductions for dependent children do not apply to Liechtenstein. Always verify current Liechtenstein regulations concerning child allowances.

• Other Deductions: Additional deductions may be available for education expenses, medical expenses exceeding CHF 6,000 per person, and charitable donations up to 10% of taxable income.

Wealth Tax

Liechtenstein residents are subject to an annual wealth tax, calculated on the net worth of all assets. Most income derived from assets subject to wealth tax is exempt from income tax, creating a level of "decision neutrality."

Social Security Contributions

Both employers and employees contribute to social security, covering old-age, disability, and unemployment insurance. The employee's contribution is 4.7% for the old-age and dependent pension schemes and disability insurance (up to a maximum of 18% of income for employed and self-employed individuals). An additional 0.5% contribution applies to unemployment insurance on the first CHF 126,000 of compensation.

Additional Considerations

• Tax Treaties: Liechtenstein has a network of tax treaties to avoid double taxation for residents earning income abroad. Always check the specific treaty provisions.
• Deadlines: The deadline for filing the annual tax return is typically March 31st of the following year.
• Professional Advice: Consulting a tax advisor is recommended for personalized guidance and optimization.

It's crucial to consult official government resources or a qualified tax advisor for the most up-to-date and precise information on tax obligations in Liechtenstein, as regulations may be subject to change. This information is current as of February 5, 2025, and might not reflect future adjustments.