On July 5, 2016, the Liechtenstein government initiated a consultation on the implementation of Country-by-Country (CbC) reporting and the OECD’s Multilateral Competent Authority Agreement on the Exchange of Country-by-Country Reports (“CbC MCAA”). See BEPS Action 13. The consultation will run until August 2, 2016, and the measures would apply from January 1, 2017, a year later than the OECD-recommended timeline. See press release.
Following a working group’s recommendation, the government concluded that Liechtenstein should implement CbC reporting. The consultation would amend Articles 84(5), 85(3), and 86(1) of the Liechtenstein Tax Act and introduce a new CbC Act.
The measures align with the OECD BEPS Action 13 minimum standard. Specifically, Liechtenstein-based multinationals with annual consolidated group revenue of CHF 900 million or more in the preceding fiscal year, would have to submit a CbC report to the Liechtenstein tax authorities. The CbC report could be filed in German or English.
The measures also include a secondary filing mechanism that would allow the Liechtenstein tax authorities to obtain a CbC report from a Liechtenstein-based or foreign constituent entity of a foreign-parented multinational group.
Failure to comply with the CbC reporting requirements could lead to penalties ranging up to CHF 250,000.
Exchange of CbC Data
On January 27, 2016, Liechtenstein signed the CbC MCAA. See the list of signatories as of June 30, 2016. Under the CbC MCAA, signatories may exchange CbC reports with other signatories if they have CbC reporting requirements in place and are a party to the OECD Convention, which Liechtenstein signed on November 21, 2013.
The OECD Convention includes provisions regarding the exchange of information on request, spontaneous information exchange, tax examinations in other countries, simultaneous tax examinations and assistance in tax collection.
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