The government explained that the DTA with Germany takes into consideration on one hand the particular economic structure of the Principality, as both an industrial country and a financial centre located at the heart of Europe, and on the other, the competitiveness of Liechtenstein compared with Austria and Switzerland.
The DTA agreement is oriented towards current Economic Cooperation and Development (OECD) developments and standards on double tax agreements in other areas, the government said.
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Germany is the second most important export country for the Liechtenstein economy after Switzerland, it pointed out.
The agreement provides for a zero rate of tax applicable to certain cross border dividend, interest and royalty payments, as well as for an agreed anti-abuse provision.
Additionally, it aims at enhancing cooperation between the tax authorities in both countries and contains a comprehensive binding arbitration clause, the government said.
In September 2009, Liechtenstein and Germany had concluded an agreement in accordance with the OECD standard on cooperation and information exchange in tax matters and the same was enforced in October 2010.
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