Liechtenstein Decreases VAT Interest Rates for Late Payments and Refunds

New VAT Interest Rates Effective January 2026

The Principality of Liechtenstein has officially reduced the interest rates applicable to late Value Added Tax (VAT) payments and VAT refunds. As published in the Liechtenstein Official Gazette on December 9, the new rate will be 4%, down from the previous 4.5%. This change is set to become effective on January 1, 2026. The regulation, identified as Regulation No. 641.201, outlines these adjustments under the VAT Ordinance.

Details of the Regulatory Change

The decision, formalized through Regulation No. 641.201, specifically targets the interest applied to overdue VAT liabilities and the interest paid on VAT refunds. This uniform reduction aims to streamline financial obligations and reimbursements related to VAT within the country. The publication date of the regulation in the Official Gazette was December 9, 2025, providing clear notice to all affected parties ahead of its implementation.

Context within Liechtenstein's Tax Landscape

Liechtenstein's VAT system is closely aligned with that of Switzerland, a relationship established through a customs union treaty. This often means that changes in Swiss VAT law or related financial regulations can influence Liechtenstein's approach. For instance, Switzerland has also announced a reduction in its federal tax interest rates for 2026, moving from 4.5% to 4%, mirroring Liechtenstein's adjustment. The general VAT rate in Liechtenstein currently stands at 8.1%, effective since January 1, 2024.

Implications for Businesses and Taxpayers

The reduction in interest rates is expected to have a direct impact on businesses and individuals subject to VAT in Liechtenstein. For those facing late payment penalties, the financial burden will be marginally eased. Conversely, taxpayers awaiting VAT refunds will receive a slightly lower interest compensation. This adjustment is part of ongoing efforts to adapt and refine the country's tax framework, ensuring clarity and efficiency for all stakeholders as the new year approaches. The effective date of January 1, 2026, provides a clear timeline for the adoption of these new financial parameters.