Important tax questions related to COVID19 – focus on Liechtenstein

The current situation due to the extraordinary COVID measures may also have an impact on the tax situation of employees. One year after the start of the COVID-19 pandemic and in view of the submission of the tax returns for the years 2020 and 2021, significant questions are increasingly arising regarding the imputation / deduction of individual costs. Below you will find an overview with current information that may also affect your tax return.

The Principality of Liechtenstein does not have any specific regulations for deductions of professional expenses during the COVID pandemic. In general, however, it must be noted that the deductions are also lower. For employees domiciled in Switzerland, the regulations of the canton of domicile are decisive with regard to deductions.

According to the double taxation agreement between Switzerland and the Principality of Liechtenstein, the non-cross-border commuter regulation came into force from 45 days of non-return. However, there is a mutual agreement on this (valid from March 11, 2020). The limit of 45-non-return days will be reduced aliquot for the duration of the measures. Here, however, there is to note that the employer must certify the Corona measures applicable to the company and the resulting home office days.

In the case of continued payment of wages without the performance of activities, the performance of work in 2019 must generally be taken into account. Compensation from the state is to be treated the same as wages. The employee must prove that corresponding work days are taxed in another state. (Inclusion of tax base of other state).

According to the agreement between Switzerland and the Principality of Liechtenstein in the area of social insurances, COVID-19 should have no effect on the subordination under social insurance law. The employee remains/becomes socially insured in the state in which he/she normally works.

The most important at a glance:
COVID-19 has hardly any impact on the deductions to be claimed by natural persons in Liechtenstein.
The non-return days for non-border commuters according to the DBA FL-CH will be reduced aliquot as of March 11, 2020.
The employer must certify home office days.