The OECD’s Base Erosion and Profit Shifting Project (BEPS) aims to ensure international tax equity in a constantly evolving world, particularly with the digitalisation and globalisation of companies and the economy. One key aspect of BEPS 2.0 is the introduction of a global minimum tax rate. Under the "Global Anti-Base Erosion (GloBE)" rules, multinational enterprise (MNE) groups with annual global consolidated sales exceeding €750 million are subject to a minimum effective tax rate of 15%.
Following its approval by the Liechtenstein Parliament on 10 November 2023, the Liechtenstein government enacted the GloBE Law (global minimum tax) on 22 December 2023, which came into force on 1 January 2024. Liechtenstein entities that meet the global minimum tax threshold are now subject to a Qualified Domestic Minimum Top-up Tax (QDMTT) and an Income Inclusion Rule (IIR) at 15% for tax years beginning on or after 1 January 2024.
The effective date of the Under-Taxed Profits Rule (UTPR) is yet to be determined. It will require a separate ordinance and cannot come into effect earlier than 1 January 2025. As of now, the UTPR has not been implemented, and the timeline for its introduction remains uncertain.
Liechtenstein generally follows OECD guidelines, with its law incorporating a direct and static reference to the OECD GloBE Model Rules as they currently stand. As a result, future adjustments to the OECD GloBE Model Rules will not automatically apply in Liechtenstein but will instead require implementation through separate regulations. At present, the existing OECD GloBE guidance applies.
Liechtenstein’s GloBE rules incorporate the OECD GloBE Model Rules and are codified in Article 1 of the GloBE Law. These rules introduce:
- Liechtenstein supplementary tax, also known as the Qualified Domestic Minimum Top-up Tax (QDMTT);
- IIR supplementary tax (Income Inclusion Rule); and
- UTPR supplementary tax (Under-Taxed Profits Rule).
This framework raises the question of which jurisdiction is entitled to impose the tax difference between the national tax rate and the GloBE minimum tax rate of 15%.
The QDMTT ensures that Liechtenstein’s tax authorities can impose the 15% tax rate on a business unit of an MNE in Liechtenstein, thereby preventing other jurisdictions from levying the tax difference.
The IIR supplementary tax allows Liechtenstein’s tax authorities to collect the "top-up tax" at the parent company level for a foreign subsidiary if the GloBE tax rate of 15% is not met.
The UTPR supplementary tax enables Liechtenstein’s tax authorities to impose the effective 15% tax on business units within Liechtenstein from other group companies, but only if the IIR is not implemented in the parent company’s jurisdiction. Under the GloBE Model Rules, priority is given to jurisdictions with QDMTTs.
Article 13 of the GloBE Law specifies how these supplementary taxes can be levied. Taxpayers must file a single tax return for each case. The tax base, according to GloBE rules, is derived from financial statements relevant to consolidated financial statements, with GloBE corrections applied. This requires significant data from MNEs, making an extensive data strategy, operational readiness assessment, or modelling approach central to compliance. Our GloBE data input catalogue offers further guidance in this area.
The applicable accounting standards of the parent company are decisive for consolidated financial statements, as stipulated in Article 5, paragraph 2, letter (c) of the GloBE Law. Recognised standards include US GAAP, IFRS, IFRS adopted by the EU under Regulation (EC) No. 1606/2002 (as incorporated into the EEA), and recognised accounting principles of EEA member states. Consequently, the "Liechtenstein Persons and Companies Act (PGR)" is also accepted as an accounting standard, according to the consultation report.
It should be noted that most GloBE rules rely heavily on relevant accounting standards, necessitating a deeper understanding of these standards for proper interpretation.
All legal entities, including AGs and GmbHs, as well as establishments (Anstalt), foundations, and trusts, qualify as GloBE-relevant legal entities—even those exempt from preparing consolidated financial statements in Liechtenstein.
The OECD’s "safe harbour" provisions also apply, meaning CBCR (Country-by-Country Reporting) safe harbour rules can be used in Liechtenstein.
Liechtenstein entities within the scope of Pillar 2 must register within six months of the first financial year being in scope for GloBE. The FL GloBE Registration Form is available on the tax authority's website.
The first GloBE Information Return (GIR) is due within 18 months (15 months for subsequent years), while the Liechtenstein QDMTT and IIR returns are due within 12 months following the financial year-end. Extensions are available upon written request. However, no details on tax return forms or systems have been published yet.
Further information about the global minimum corporate tax rate is available on our PwC website and the PwC Pillar Two Country Tracker.
