On July 4, 2023 the Government of Liechtenstein approved a consultation report on proposed amendments to the Liechtenstein Personen- und Gesellschaftsrechts (the persons and companies Act) and the Liechtenstein Wirtschaftsprüfergesetzes (the Auditors and Auditing Companies Act) to implement Directive (EU) 2022/2464 on corporate sustainability reporting (CSRD) and Directive (EU) 2021/2101 regarding the disclosure of income tax information by certain undertakings and branches (CBCR Directive). The consultation period ends on August 29, 2023.

In this respect the Liechtenstein Government has published a draft law proposal as well as an Explanatory Memorandum.

The CSRD requires large companies, public interest entities (with the exception of micro-enterprises) and certain branches and companies with a third-country ultimate parent company to include a sustainability report in their annual report and to disclose it. In the future, the companies concerned will have to disclose various information on various sustainability issues in their annual reports. As a result, in the future investors and other stakeholders will be better able to make informed decisions on sustainability issues.

The new reporting obligations are further specified in practice by the new European Sustainability Reporting Standards (ESRS), which are issued by the EU Commission by means of delegated regulations. The sustainability reporting is subject to the obligation to be audited by an auditor or an auditing company.

The CBCR guideline applies specifically to large international corporations. It obliges top holdings and standalone companies whose revenues exceed EUR 750 million to submit income tax reports. Banks are already subject to their own regulations and are not affected by the new requirements. The same goes for standalone companies and top holdings, provided that all their group companies have their registered office in Liechtenstein. On the other hand, large and medium-sized companies of which the ultimate parent companies are located in another jurisdiction and Liechtenstein branches of companies with their registered in office in another jurisdiction will subject to the new requirements. The income tax reports are to be drawn up in accordance with a specified layout, reviewed and approved by an auditor and published on the website of the company concerned and must be made available there for a period of five years. This is intended to make the income tax information of multinational companies and groups with large revenues that are either domiciled in the EEA or have subsidiaries or branches of a certain size in the EEA transparent.

The Draft legislation and the Explanatory Memorandum can be found here. (Available in the German language)

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