Harmful Tax Practices – 2019 Peer Review Reports on the Exchange of Information on Tax Rulings

Liechtenstein

Liechtenstein has met all aspects of the terms of reference (OECD, 2017[3]) (ToR) for the calendar year 2019 (year in review) and no recommendations are made.

Liechtenstein can legally issue four types of rulings within the scope of the transparency framework.

In practice, Liechtenstein issued rulings within the scope of the transparency framework as follows:

• 18 past rulings;

• For the period 1 April 2017 - 31 December 2017: six future rulings;

• For the calendar year 2018: five future rulings; and

• For the year in review: three future rulings.

Peer input was received from two jurisdictions in respect of the exchanges of information on rulings received from Liechtenstein. The input was positive, noting that information was complete, in a correct format and received in a timely manner.

A. The information gathering process

678. Liechtenstein can legally issue the following four types of rulings within the scope of the transparency framework: (i) cross-border unilateral APAs and any other cross-border unilateral tax rulings (such as an advance tax ruling) covering transfer pricing or the application of transfer pricing principles; (ii) rulings providing for unilateral downward adjustments; (iii) permanent establishment rulings; and (iv) related party conduit rulings.

679. For Liechtenstein, past rulings are any tax rulings within scope that are issued either: (i) on or after January 2015 but before 1 April 2017; or (ii) on or after 1 January 2012 but before 1 January 2015, provided they were still in effect as at 1 January 2017. Future rulings are any tax rulings within scope that are issued on or after 1 April 2017.

680. In the prior years’ peer review reports, it was determined that Liechtenstein’s undertakings to identify past and future rulings and all potential exchange jurisdictions were sufficient to meet the minimum standard. In addition, it was determined that Liechtenstein’s review and supervision mechanism was sufficient to meet the minimum standard. Liechtenstein’s implementation remains unchanged, and therefore continues to meet the minimum standard.

681. Liechtenstein has met all of the ToR for the information gathering process and no recommendations are made.

B. The exchange of information

682. In the prior years’ peer review reports, it was determined that Liechtenstein’s process for the completion and exchange of templates were sufficient to meet the minimum standard. With respect to past rulings, no further action was required from Liechtenstein. Liechtenstein’s implementation in this regard remains unchanged and therefore continues to meet the minimum standard.

683. Liechtenstein has international agreements permitting spontaneous exchange of information, including being a party to the (i) Multilateral Convention on Mutual Administrative Assistance in Tax Matters: Amended by the 2010 Protocol (OECD/Council of Europe, 2011[4]) (“the Convention”) and (ii) bilateral agreements in force with 14 jurisdictions.1

684. For the year in review, the timeliness of exchanges is as follows:

 

Future rulings in the scope of the transparency framework	Number of exchanges transmitted within three months of the information becoming available to the competent authority or immediately after legal impediments have been lifted	Delayed exchanges
		Number of exchanges transmitted later than three months of the information on rulings becoming available to the competent authority	Reasons for the delays	Any other comments
	12	0	N/A	N/A

 

Follow up requests received for exchange of the ruling	Number	Average time to provide response	Number of requests not answered
	0	N/A	N/A

685. Liechtenstein has the necessary legal basis for spontaneous exchange of information, a process for completing the templates in a timely way and has completed all exchanges. Liechtenstein has met all of the ToR for the exchange of information process and no recommendations are made.

C. Statistics (ToR IV)

686. The statistics for the year in review are as follows:

 

Category of ruling	Number of exchanges	Jurisdictions exchanged with
Cross-border unilateral advance pricing agreements (APAs) and any other cross-border unilateral tax rulings (such as an advance tax ruling) covering transfer pricing or the application of transfer pricing principles	11	Australia, Austria, France, Germany, Hong Kong (China), Ireland, Isle of Man, Luxembourg, Singapore, Switzerland, United Kingdom
Cross-border rulings providing for a unilateral downward adjustment to the taxpayer’s taxable profits that is not directly reflected in the taxpayer’s financial / commercial accounts	0	N/A
Permanent establishment rulings	De minimis rule applies	N/A
Related party conduit rulings	De minimis rule applies	N/A
De minimis rule	4
Total	151

1 Including two rulings that fell into more than one category and were exchanged with more than one jurisdiction under the BEPS Action 5 report (OECD, 2015[1]).

D. Matters related to intellectual property regimes (ToR I.4.1.3)

687. Liechtenstein does not offer an intellectual property regime for which transparency requirements under the Action 5 Report (OECD, 2015[1]) were imposed.

Summary of recommendations on implementation of the transparency framework

 

Aspect of implementation of the transparency framework that should be improved	Recommendation for improvement
	No recommendations are made.

References

[3] OECD (2017), BEPS Action 5 on Harmful Tax Practices - Terms of Reference and Methodology for the Conduct of the Peer Reviews of the Action 5 Transparency Framework, OECD Publishing, Paris, http://www.oecd.org/tax/beps/beps-action-5-harmful-tax-practices-peer-review-transparency-framework.pdf.

[1] OECD (2015), Countering Harmful Tax Practices More Effectively, Taking into Account Transparency and Substance, Action 5 - 2015 Final Report, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, Paris, https://dx.doi.org/10.1787/9789264241190-en.

[4] OECD/Council of Europe (2011), The Multilateral Convention on Mutual Administrative Assistance in Tax Matters: Amended by the 2010 Protocol, OECD Publishing, Paris, https://dx.doi.org/10.1787/9789264115606-en.