Full text: Taxation of foundations in Europe

The foundation may be wound up by legal rescission, dissolution of the foundation in accor-
dance with its statutes or by means of changing its legal form. 
Current efforts are underway to extensively reform foundation law in Liechtenstein. While 
existing draft laws provide for extensive changes, the principle of anonymity, which was regu-
larly criticised in the past, should not be substantially modified. 
6.3. Tax Treatment of Foundations 
Foundations themselves enjoy very extensive tax advantages regarding foundation endow-
ments, the regular taxation of foundation income, the distribution of income to the beneficiar-
ies or in the case that the foundation is wound up. 
Tax treatment of foundation endowment 
A foundation fee is charged upon creation of a foundation. For foundations that pursue a 
trade in a commercial manner, this fee amounts to 1% of the capital. An application can be 
filed for a capital amount of more than CHF 5 m to have the fee reduced to 0.5%. For a capi-
tal amount of more than CHF 10 m, the fee can be reduced to 0.3%. For other foundations 
the fee amounts to 2‰ of the capital. The minimum amount is set at CHF 250.00; the maxi-
mum amount is CHF 250,000. 
Regular taxation of foundations in Liechtenstein 
? Capital tax 
Foundations in Liechtenstein are subject to capital tax on the declared capital and the re-
serves, regardless of the foundation purpose. This tax is very moderate; the annual tax bur-
den for the following amounts of assets can be seen in the table below. 
Up to CHF 2 m                1 ‰ 
From CHF 2 m to 10  m  ? ‰  
More than CHF 10 m      ? ‰ 
For the sake of completeness, mention is made that the annual minimum burden amounts to 
CHF 1,000. 
? Earnings tax 
Earnings tax is levied on the annual net earnings; these are all profits including capital gains 
and liquidation profits from which business-related expenses are deducted. The tax amounts

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