LIECHTENSTEIN Law and Practice Contributed by: Simon Ott, Andreas Vogel, Husmira Halis and Felix Bayer, Schurti Partners Attorneys at Law Ltd
3.6 Financial Record-Keeping The requirements of financial record-keeping are primarily stipulated in the Liechtenstein Person and Company Law ( Liechtensteinisches Personen und Gesellschaftsrecht – PGR). As a rule, business accounts, accounting records, and the business cor - respondence must be stored for ten years. The most relevant offence relating to the obligations of financial record-keeping is the failure (i) to keep busi - ness accounts or records or (ii) to prepare accurate annual financial statements as part of the offence of gross negligent interference with creditors’ interests that is subject to a sentence of imprisonment of up to one year or a monetary penalty of up to 720 daily rates. In the case of the financial damage caused exceeding CHF1.2 million, or if the economic existence of many people is damaged, the sentence is imprisonment of up to two years. 3.7 Cartels and Criminal Competition Law Liechtenstein has not introduced any national antitrust or merger control law. Liechtenstein has, however, adopted a law on the implementation of competition rules in the European Economic Area. The Agreement on the European Economic Area and its appendices are directly applicable in Liechtenstein with regard to antitrust or merger control law. Accord - ing to the Agreement on the European Economic Area, cartels, joint ventures, and other forms of concerted action which may affect trade between the contract - ing parties or have the effect of hindering, restrict - ing, or distorting competition are prohibited. Further, the merger control regulations of the European Union Competition Law according to Appendix XIV of the European Economic Area Agreement are also appli - cable in Liechtenstein. In the case of breaches of the above laws and with the authorisation of either the EFTA Surveillance Authority or the European Com - mission, the Liechtenstein Office of Economic Affairs is responsible for imposing fines or periodic penalty payments. The Liechtenstein Unfair Competition Act ( Gesetz gegen unlauteren Wettbewerb – UWG) governs unfair competition and contains respective criminal law provisions. The commission of unfair competition is
Tax evasion is an infringement that is prosecuted by the Liechtenstein Tax Administration and punish - able with a fine (tax evasion being an administrative offence). The fine is usually the amount of the evaded tax or duty. It can be reduced to one-third for minor offences and increased to three times as much for seri - ous offences. In principle, tax evasion is committed by any person who, as a taxpayer, wilfully or through negligence frustrates a demand for tax which they are liable to pay by making incorrect or incomplete state - ments on a tax return or in voluntary disclosures, or by providing incorrect or incomplete information, or who otherwise culpably withholds payment of tax. Any person who deliberately designates someone else to carry out tax evasion or who deliberately con - tributes to its execution in any other way is liable to a fine of up to CHF10,000 (or CHF50,000 in serious cases or repetition of the offence), irrespective of the taxpayer’s criminal liability. Tax fraud is committed by a person who evades tax by deliberately using false, falsified, or untrue accounts or other documents. The Princely District Court has the power to render judgment in cases of tax fraud. The offence is punishable with imprisonment of up to six months or a monetary penalty of up to 360 daily rates. With regards to corporate criminal liability, a legal entity is subject to a fine if it has evaded taxes. How - ever, its organs will be held liable in the event that the imposed fine is not settled by the legal entity. In cases of tax fraud, the organs of the legal entity will be held criminally liable. It should be emphasised that the Liechtenstein Tax Act provides for the possibility of a voluntary disclosure in the case of tax evasion or tax fraud committed after 1 January 2011. The offender will not be held criminally liable in the case of a voluntary disclosure and pay - ment of the uncollected tax plus interest. Any subse - quent voluntary disclosure does not grant immunity from prosecution but reduces the fine to one-fifth of the tax evaded. The offender would then have to pay the uncollected tax plus interest and the fine.
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