Liechtenstein has enacted new country by country reporting (CbCR) rules that will apply for 2020 and beyond. The original Liechtenstein CbCR law has been in place since 1 January 2017 and has now been amended by the new rules with the goal to align the legislation to more recent guidance published by the OECD.
The changes in legislation will have implications for many Liechtenstein headquartered groups. Key points include the following:
- Liechtenstein has introduced a deemed listing provision. Under Liechtenstein’s existing law, groups were only required to file a CbCR in Liechtenstein if the group prepared consolidated accounts and had a combined revenue in excess of CHF 900m. Going forwards under the deemed listing provision, groups will now also be subject to the CbCR rules if they would have had to prepare consolidated accounts if they were listed (and if the group revenues would exceed CHF 900m).
- The new deemed listing provision will be particularly relevant for Foundations because Foundations are not required to prepare consolidated accounts under Liechtenstein’s corporate law and have therefore fallen outside of the previous CbCR rules.
- Foundations that perform purely a holding function may continue to be exempt from the new regulations but Foundations with any other source of income (e.g. interest) will not.
- Liechtenstein taxpayers that do not want to file the CbCR in Liechtenstein will in many instances be able to nominate another group company to act as a surrogate and to file the CbCR in another territory.
In addition, certain changes were made in order to ensure compliance with the EU General Data Protection Regulation (GDPR). Although CbCR rules generally only apply to legal entities, these changes were required because certain personal information on individuals is collected during the registration process.
The first period that is covered by the new rules is the year ending 31 December 2020. Whilst the first reports will not be due until 31 December 2021, Liechtenstein headquartered groups and Foundations should consider the new rules now because any new CbCR filing in Liechtenstein (or any change in filing entity) will trigger notification requirements.
By David McDonald, Partner and Leader FSTP PwC Europe, PwC Switzerland and
Robert Fischer, Director, Transfer Pricing & Value Chain, PwC Switzerland