"How are we supposed to deal with this?"

Marco Felder, Director at PwC in Zurich, considers the tax agreement between Vienna and Vaduz to be beneficial, even if it poses challenges for trustees. The agreement includes the legalization of undeclared assets through a one-off payment of 15-38% and ongoing taxation of investment income at 25% from 2014. Capital assets managed by Liechtenstein trustees in other countries are also affected. One disadvantage is the still high foundation income tax rate of 5-10% compared to Austria. Felder emphasizes that the lower current taxation in Liechtenstein compensates for the higher entry tax after a few years. He calls for tax hurdles in the Austria-Liechtenstein-Switzerland economic area to be further reduced. Despite the challenges, Liechtenstein remains attractive for the retention of assets due to its low current taxation.

Topics in the publication

• Vienna-Vaduz tax agreement
• Challenges for trustees
• Taxation of investment income
• Comparison of tax rates
• Long-term tax advantages
• Economic area Austria-Liechtenstein-Switzerland