On September 16, 2016 the Government of Liechtenstein issued a press release announcing that on September 15, 2016 Liechtenstein and Austria signed a Protocol amending their existing Double Taxation Agreement (Hereafter: the DTA).
Although the new Protocol has been signed, it has not entered into force yet. For the Protocol to enter into force, the respective ratification procedures have to have been finalized in both countries.
According to the press release issued by the Liechtenstein Government the Protocol will a.o. amend the text of Article 19 of the DTA (“Offentliche Funktionen” (Government Service)). Article 19 of the DTA allocates the right to tax to the State that acts as an employer and thus follows the paying state principle. In the press release it is stated that due to Austrian jurisprudence a clarification of the text of the Agreement was necessary to ensure the status quo.
The press release furthermore adds that the title, the preamble and the article regarding the Mutual Agreement Procedure will be amended in order to reflect the outcomes of the OECD/G20’s BEPS Project. In the future a taxpayer will no longer be required to submit his request for a Mutual Agreement procedure with the authorities of his state of residency, but he will be given the freedom to submit the request with the authorities of the contracting state of his choice.
According to the Liechtenstein government also an anti-abuse clause meeting the minimum standard as defined in the OECD/G20’s BEPS project will be inserted in the DTA.
Unfortunately we have not been able to locate the text of the Protocol yet.
Click here to be forwarded to the press release as issued by the Liechtenstein Government on September 16, 2016 (available in German language only).
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