LIECHTENSTEIN Law and Practice Contributed by: Thomas Plattner and Fabian Jenny, Ospelt & Partners Attorneys at Law Ltd.
Legal entities that pursue exclusively charitable pur - poses are exempt from tax. As a result, transferring a collection to a charitable foundation generally consti - tutes a tax‑neutral transaction. This ensures that the assets remain exempt from wealth tax at the founda - tion level. 10.4 Artworks Exempt from Inheritance/ Donation Taxes Since there are no inheritance taxes, no specific exemptions are required for artworks in this con - text. For the purposes of the net wealth tax, artworks that qualify as “household effects” ( Hausrat ) may be exempt, provided their value is not disproportionate compared to the taxpayer’s overall assets. In contrast, collections held primarily as capital investments must be declared at their fair market value. The tax authori - ties assess this classification on a case‑by‑case basis. 10.5 Trusts Liechtenstein is the only continental European jurisdic - tion that formally recognises and has codified the legal form of the trust. It incorporated the trust relationship ( Treuhänderschaft ) into the Persons and Companies Act (PGR) in 1926. The Liechtenstein trust is a flex - ible instrument for managing art collections (Articles 897–932a of the PGR). It allows a collector to transfer ownership of their collection to a trustee, who then administers the assets for the benefit of designated beneficiaries. The trust assets form a separate fund that is legally insulated from the trustee’s personal creditors.
As a result, art collections in Liechtenstein are fre - quently held through foundations, which may quali - fy for the special tax status of a Private Investment Structure ( Privatvermögensstruktur , PVS). This status caps the total annual tax liability at the minimum cor - porate income tax of CHF1,800, provided the founda - tion restricts its activities to managing its own assets and does not engage in commercial activities. To ensure professional governance, every trust or foundation must appoint at least one qualified board member who is a licensed Liechtenstein trustee and subject to supervision by the Liechtenstein Financial Market Authority. The transfer of a registered cultural good into a trust or foundation triggers a notification requirement under the KGG to the Office of Culture. If the cultural good is under formal protection, the transfer requires pri - or approval. This combination of flexible structuring and rigorous oversight makes Liechtenstein a pre - mier jurisdiction for the international management of art assets. The legal stability provided by the PGR ensures that collections can be preserved across mul - tiple generations.
119 CHAMBERS.COM
Powered by FlippingBook