Liechtenstein: AEOI and FATCA changes effective 1 January 2021

Liechtenstein: AEOI and FATCA changes

Changes under the Automatic Exchange of Information in Tax Matters (AEOI) and FATCA regimes have an effective date of 1 January 2021.


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AEOI changes

The AEOI law and ordinance in Liechtenstein were amended, and the changes include:

  • Repeal of the “opt-in clause”—Until now, Liechtenstein entities could choose to qualify as a financial institution; this “opt-in” clause is repealed. Entities that have used that option need to be reclassified by 31 December 2021 and inform their account-holding financial institutions of their new status.
  • “Passive NFE” as the new default status—A clause providing that entities that have not informed account-holding financial institutions of their AEOI status are to be treated as financial institutions (meaning they must comply with the reporting and other obligations under AEOI themselves) is repealed. Beginning 1 January 2022, Liechtenstein financial institutions must treat entities that have not provided information on their AEOI status as passive NFEs.
  • New registration requirement for all reporting financial institutions—Reporting Liechtenstein financial institutions previously only had to register on the Liechtenstein AEOI portal if they maintained reportable accounts. The new law provides that all Liechtenstein reporting financial institutions must register. However, “nil” reporting is still not required in Liechtenstein.

FATCA changes

  • U.S. taxpayer identification number (TIN) as a mandatory requirement—The reporting of a U.S. TIN is mandatory from the year 2020 (to be reported in 2021). Liechtenstein financial institutions that do not hold a U.S. TIN for their clients are to try to obtain this identifier from the clients as soon as possible. When this is not possible and “AAAAAAAAA” is reported, financial institutions will need to be able to explain to the IRS why the TIN cannot be obtained. Unless the financial institution can demonstrate that it has adequate procedures in place to obtain TINs and has made reasonable efforts to obtain the TINs, the IRS may consider this as significant non-compliance and could remove the financial institution’s global intermediary identification number (GIIN) from the IRS foreign financial institution (FFI) list.

Read a December 2020 report prepared by the KPMG member firm in Switzerland

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