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Internal Market: Liechtenstein's tax rules on notional interest deduction in breach of EEA law



The Liechtenstein rules on notional interest deduction breach the EEA rules on freedom of establishement and free movement of capital. That is the conclusion of a reasoned opinion delivered by the EFTA Surveillance Authority today.

The Liechtenstein rules provide that a notional interest deduction is granted for Liechtenstein real estate and permanent establishments, while no such deduction is granted for net assets in real estate and permanent establishments in other EEA States.

«The Authority considers that this is a restriction contrary to the EEA rules on the freedom of establishment and the free movement of capital. It discourages Liechtenstein companies from setting up permanent establishments in other EEA States, and it discourages residents in Liechtenstein from investing in other EEA States.» said Mr. Ólafur Einarsson, Director of the EFTA Surveillance Authority's Internal Market Affairs Directorate.

A reasoned opinion is the second stage in infringement proceedings. The Authority may bring the matter before the EFTA Court if Liechtenstein fails to take the measures necessary to comply with the reasoned opinion within two months.


For further information, please contact:

Mr Ólafur Einarsson
Director, Internal Market Affairs Directorate
tel. (+32)(0)2 286 18 73

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