CJEU – Recent Developments in Direct Taxation 2023

1. Introduction

The two cases discussed in this section concern the imposition of a municipal surcharge on the income of taxpayers residing abroad in the context of an assessment for limited tax liability on income from employment in the Liechtenstein public sector. In the first case, both the Liechtenstein Administrative Court (VGH) and the Liechtenstein Constitutional Court (StGH) reviewed the challenge of a local civil servant residing in Austria against the imposition of a 200% municipal surcharge for the 2016 tax period. The second case involved a German citizen who lived in Switzerland and was employed by the Liechtenstein government. Likewise, he contested the flat-rate municipal surcharge for the 2019 tax year. The VGH decided to refer the second matter to the EFTA Court for an advisory opinion. The decision made by the Court is expected to have significant implications for the future.

2. Facts and Legal Background of the Cases

On 1 January 2011, the new Liechtenstein Tax Act (Gesetz vom 23 September 2010 über die Landes- und Gemeindesteuern, SteG), referred to as Liechtenstein Tax Act (LTA), entered into force in Liechtenstein. Individuals who are resident in Liechtenstein ar...