MEMORANDUM OF UNDERSTANDING REGARDING THE AGREEMENT 

BETWEEN THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND THE 

GOVERNMENT OF THE PRINCIPALITY OF LIECHTENSTEIN TO 

IMPROVE INTERNATIONAL TAX COMPLIANCE AND TO IMPLEMENT FATCA 

At the signing today of the Agreement between the Government of the United States of 

America and the Government of the Principality of Liechtenstein to Improve International Tax 

Compliance and to Implement FATCA (hereinafter the "Agreement'·). and noting that the Government of the Principality of Liechtenstein has infonned the United States that the Agreement 

falls under the provisions of Article 8 Paragraph 2 of the Liechtenstein Constitution, the representatives of the United States of America and the Principality of Liechtenstein wish to confirm 

their understanding of the following: 

With reference to Subparagraph 2(a)(3) of Article 2 of the Agreement 

It is understood that the Principality of Liechtenstein intends for each Reporting Liechtenstein 

Financial Institution to use a Global Intermediary Identitication Number ("GIIN") issued by the 

Internal Revenue Service as the identifying number referenced in Subparagraph 2(a)(3) of Article 2 of the Agreement. 

With reference to Subparagraph l (c) of Article 4 of the Agreement 

It is understood that the Principality of Liechtenstein intends for Liechtenstein Financial Institutions to comply with the registration requjrements applicable lo Financial Institutions in Partner 

Jurisdictions by registering with the Internal Revenue Service and obtaining a GIIN from the 

Internal Revenue Service. 

With reference to paragraph 1 of Article 10 (Term of Agreement) of the Agreement 

The United States understands that the Government of the Principality of Liechtenstein plans to 

present the Agreement to its Parliament for its approval in 2014 together with draft legislation 

that is to implement the provisions of the Agreement with the goal of having the Agreement and 

the legislation enter into force not later than September 30, 2015. Based on this understanding, as 

of the date of signature of the Agreement. the United States Department of the Treasury intends 

to treat each Liechtenstein Financial Institution, as that term is defined in the Agreement, as 

complying with, and not subject to withholding under section 1471 of the U.S. Internal Revenue 

Code during such time as the Principality of Liechtenstein is pursuing the necessary internal procedures for entry into force of the Agreement. The United States further understands that the 

Fiscal Authority of the Principality of Liechtenstein intends to contact the United States Department of the Treasury as soon as it is aware that there might be a delay in the Liechtenstein internal approval process for entry into force of the Agreement such that the Principality of Liechtenstein would not be able to provide its notification under paragraph I of Article l 0 of the 

Agreement prior to September 30, 2015. If upon consultation with the Principality of Liechtenstein. the United States Depat1ment of the Treasury receives credible assurances that such a delay is likely to be resolved in a reasonable period of time, the United States Department of the 

Treasury may decide to continue to apply FA TCA to Liechtenstein Financial Institutions in the 

manner described above as long as the United States Department of the Treasury assesses that 

the Principality of Liechtenstein is likely to be able to send its notification under paragraph 1 of 

Article 1 0 by September 30, 20 16. It is understood that should the Agreement enter into force 
after September 30. 2015, any infonnation that would have been reportable under the Agreement 

thereafter (and prior to its entry into force) had the Agreement been in force by September 30, 

2015, is owed on the September 30 next following the date of entry into force. 

With reference to 8 (2) through B(4) of section VI of Annex I of the Agreement 

It is understood that the tcm1 ·'nonprofit organizations" includes alJ Entities that exclusively and 

irrevocably pursue common-benefit purposes as defined in article 107 paragraph 4a of the Law 

on Persons and Companies (PGR, LGBl. 1926/Nr. 4 of 26 January 1926) without the intention of 

making a profit and that are tax exempt according to article 4 paragraph 2 ofthc Tax Act (SteG, 

LGBI. 201 0/Nr. 340 of 18 November 201 0). It is also understood that any such Entities are not 

treated as Financial Institutions. 

With reference to paragraph A. of section I. of Annex II of the Agreement 

Tl is understood that the term "political subdivision" includes all Liechtenstein municipalities 

("Gcmeinden ''). 

With reference to paragraph D. of section II of Annex II of the Agreement 

It is understood that the tenn ·'Investment Entity Wholly Owned by Exempt Beneficial Owners" 

includes: 

I. Single Investor Funds if the single investor is an institution or body or fund of the social security system or a pension or retirement ar ge nt~ 

2. Investment fimds for qualified investors iC the investors are restri cted to pension or retirement 

arrangements~ 

With reference to section IV of Annex II of the Agreement 

It is understood that Non-Reporting Liechtenstein Financial Institutions that are treated as 

deemed-compliant FFls for purposes of section 1471 ofthe U.S. Internal Revenue Code should 

have no registration requirement as part of the FFI registration process or certification procedures by the IRS, except that registration should be required in the case of a Financial Institution 

described under Section III.A of Annex JJ of the Agreement that has a reporting obligation with 

respect to one of its accounts or that is a trustee reporting U.S. Reportable Accow1ts of a trust in 

accordance with Section lV.A of Annex II of the Agreement. 

With reference to paragraph A of section V of Annex II of the Agreement 

It is understood that accounts and Insurance Contracts described in paragraph A of section V of 

Annex II of the Agreement include: 

a) Collective life insurance in the field of the occupational pension and benefit plans; 

b) Collective life insurances outside the field of the occupational pension and benefit plans; 

c) Restricted pension plan insurance; 

d) Vested benefit insurances; 

c) Vesled benefit accounts; 

f) Accident and health insurances; 

g) lndenmity insurances: 

h) Rcinsurances. 
With reference to paragraph C. of section VI. of Annex II of the Agreement 

It is understood that: 

(A) The term ·•trust" includes any trust including any Related Entity managed and/or controlled 

in Liechtenstein regardless of the country of formation, if the trustee or the trust controls the Related Entity. For this purpose control includes direct or indirect ownership of more than 50 percent of the vote or value in an Entity, to the extent that one of the trustees of the trust is either a 

Reporting U.S. Financial Institution, a Reporting Model 1 Ffi, a Deemed Compliant FFI as defmed in Section 111 (A) of this Annex II, or a Participating FFI and reports all information required to be reported pursuant to the Agreement with respect to all U.S. Reportable Accounts of 

the trust ('·reporting trustee"). 

(B) The term ''trust" also includes any discretionary trust formed under the laws of Liechtenstein 

which gives the trustee the power to make a distribution from the trust to, or for the benefit of, 

any person. and: 

( 1) the trust te1ms specifically identify the entire class of beneficiaries and none are U.S. persons: 

or 

(2) includes language that is irrevocable which provides that under the tem1s of the trust, (a) no 

part of the income or corpus of the trust may be paid or accumulated to or for the benefit or a 

U.S. person, and (b) if the trust terminates at any time during the taxable year, no part of the income or corpus of such trust should be paid to or for the benefit of a U.S. person. 

It is understood that the trustee of a discretionary trust should have a reporting obligation only 

for the tax year in which a distribution is made to Specified U.S. Persons or to a Non-U.S. Entity 

with one or more Controlling Person(s) that is(are) a Specified U.S. Person. Tt is also tmderstood 

that the information required to be reported should only include the an10unt distributed to the 

U.S. Specified Person or to a Non-U.S. Entity with one or more Controlling Pcrson(s) that is(arc) 

a Specified U.S. Person and the date of said distribution. 

Signed at Vaduz, this 16111 day of May, 2014, in duplicate, in the English language. A German 

language text should be considered equally authentic upon a subsequent exchange of diplomatic 

notes between the United States and the Principality of Liechtenstein confirming its conformity 

with the English language text. 

FOR THE GOVERNMENT OF THE 

UNITED STATES OF AMERICA: 

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FOR THE GOVERNMENT OF THE 

PRINCIPALITY OF LIECHTENSTEIN: 

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