«Tax Incentives on Research and Development (R&D)»

Since January 1, 2011, Liechtenstein has offered tax relief for income from relevant intellectual property (IP) rights. This new regulation allows a tax deduction of 80% on income from IP rights, which reduces the effective tax burden. Eligible IP rights include patents, trademarks, designs, software and technical and scientific databases developed or acquired after January 1, 2011. The tax deduction can be claimed annually when filing the corporate tax return.

The IP Box system also applies to income from IP from permanent establishments and self-employed persons. It complies with the OECD guidelines and the fundamental freedoms of the EU. The EFTA Surveillance Authority has classified it as a non-selective tax measure. To monitor international developments, the Liechtenstein government has set up a working group to combat base erosion and profit shifting (BEPS).

Topics in the publication

• Introduction of tax relief for intellectual property rights
• Eligible IP rights
• Scope of application and annual option
• Compatibility with international standards
• Tax and administrative procedures
• Tax law framework
• Harmonization and competition aspects
• International developments and BEPS initiative
• Future prospects and recommendations