Liechtenstein VAT FAQs

What is VAT?

Value Added Tax (“VAT”) is a consumption tax that is borne ultimately by the final consumer of a good or service.

VAT generally applies to all goods and services where their place of supply pursuant to the Mehrwertsteuergesetz (“VAT Act”) is in Liechtenstein.

Based on treaty agreements between Liechtenstein and Switzerland, the territories of both states form a common "VAT domestic territory." If the VAT Act refers to “domestic,” this is understood to mean the territory of both states. Liechtenstein has generally adopted Switzerland’s VAT law as their own, and they are largely identical.

Who must pay VAT?

According to Article 10 of the VAT Act, any natural or legal person who, independently and on a regular basis, carries out an economic activity is considered a taxable person regardless of the purposes or result of that activity. Economic activity is defined as the supply of goods or services for consideration within Luxembourg.

Generally, VAT is invoiced by the supplier that is selling goods or services and collected from the customer. Subsequently, the supplier reports and remits the collected VAT to the tax authorities.

Why am I being charged VAT?

Where a non-resident business such as Freshworks is registered with the Swiss Federal Tax Administration (“SFTA”), they are obligated to charge Liechtenstein VAT on sales of electronically supplied services made to customers located in Liechtenstein and remit this VAT to the SFTA.

What is a VAT number?

A Liechtenstein VAT number is a unique 5-digit number.

Where you have provided your VAT number, this will show on invoices issued to you by Freshworks.

How is Freshworks determining which customers Liechtenstein VAT applies to?

Freshworks will apply VAT based on the VAT rules for a non-resident supplier providing electronically supplied services to customers in Liechtenstein.

It is your responsibility as a customer to ensure that your bill-to/ship-to address is correct.

Does Freshworks provide VAT-exempt or non-VATable services?

No, all services currently provided by Freshworks to customers in Switzerland and Liechtenstein are subject to Swiss VAT.

Are there any special exemptions applicable for charities under which VAT may not be charged?

No, there are no exemptions from VAT available under Swiss VAT rules for the services Freshworks supplies to charities in Switzerland and Liechtenstein.

Will VAT apply even if a Liechtenstein company provides a valid VAT number to Freshworks?

Yes. VAT applies to all the products/services that Freshworks makes to customers in Liechtenstein.

Disclaimer

Every customer is unique, and so are their specific tax circumstances. The above-stated information should not be considered as tax advice but as a general overview of relevant tax rules. Freshworks cannot provide you with tax advice for your individual situation, and therefore we strongly recommend speaking with a professional tax advisor for tailored advice.