{ "docId": "019dd923-5e88-73ef-bd58-d60590226592", "docSlug": "4dabb861968e8184", "documentTitle": "ey family office study client deck asia pacific", "authorId": "MorganStanley", "authorName": "EY", "documentKindSlug": "consulting-deck", "documentKindLabel": "Consulting deck", "sourceTypeSlug": "equity_research", "sourceTypeLabel": "Equity research", "presentationDate": null, "orientation": "portrait", "aspectRatio": 0.707, "pageNumber": 48, "pageCount": 64, "prevPage": 47, "nextPage": 49, "slideType": "appendix_disclosure", "function": "establish_context", "density": "overcrowded", "nDataPoints": 8, "notes": "Part of EY Family Office Guide; technical legal/tax disclosure.", "elementsJson": [ "paragraph" ], "metadataConfidence": 0.95, "imagePath": null, "slideHref": "/slides/019dd923-5e88-73ef-bd58-d60590226592/48", "deckHref": "/decks/019dd923-5e88-73ef-bd58-d60590226592", "deckJsonHref": "/decks/019dd923-5e88-73ef-bd58-d60590226592.json", "deckAnchorHref": "/decks/019dd923-5e88-73ef-bd58-d60590226592#slide-48", "components": [ { "bbox": { "h": 0.12, "w": 0.28, "x": 0.35, "y": 0.38 }, "kind": "list", "text": "Capital tax on net equity is also due once a year and varies, as it is levied on the cantonal and communal level only, between 0.001% and 0.525% depending on the location of the entity and the tax privileges available, if any. Approximately half of the cantons foresee that the corporate income tax can be credited against the net equity tax.", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "eee55e37-2bc8-47ac-a242-7fc61212b679", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.22, "w": 0.28, "x": 0.05, "y": 0.75 }, "kind": "list", "text": "Corporate income tax is levied at the federal, cantonal and communal level. Whereas the federal statutory tax rate is 8.5% of the net profit after tax, the cantonal and communal rates vary depending on the location of the entity and the tax privileges available, if any. In case of ordinary taxation, the total effective maximum tax burden, consisting of federal, cantonal and communal taxes, ranges from approximately 12% to 25%. Provided a tax privilege is applicable, total effective maximum tax burden starts at approximately 8%.", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "f9562173-bc79-4bbf-907c-b97fff724374", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.28, "x": 0.35, "y": 0.52 }, "kind": "paragraph", "text": "Usually, family offices provide their services mainly to related parties in a closed environment. In order to avoid discussions with the tax authorities on the taxable profit, family offices should either prepare sufficient documentation on their transfer prices or reach a respective agreement with the authorities in an advance tax ruling. Such a ruling would generally define the taxable profit based on the cost-plus method, with a markup between 5% and 15%, depending on the value added of the operations in Switzerland.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "200b4762-fe9b-43f5-b7c6-db5d6593fef3", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.28, "x": 0.65, "y": 0.63 }, "kind": "paragraph", "text": "Also, it is worth mentioning that due to the Hague Convention of 1 July 1985 on the law applicable to trusts and on their recognition, in force in Switzerland since 2007, Swiss-based family offices acting as trustee or protector should generally not trigger negative tax implications in Switzerland, as both are not the beneficial owners of the trust assets, although the trustee holds the legal title.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "330d5199-bcc6-4a0b-941f-957bdb84fb23", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.28, "x": 0.65, "y": 0.47 }, "kind": "paragraph", "text": "Economic double taxation, such as taxation of the corporation and the taxation of the shareholder, according to his or her distribution, should also be considered. But it may be reduced or avoided by mitigating provisions similar to the partial taxation of dividends distributed to Swiss residents or the participation exemption applicable to Swiss corporate shareholders, provided they hold in both structures a minimum share of 10% in the family office. For the participation exemption, an alternative fair market value of the participation of a minimum of CHF1m is sufficient.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "4033ed5a-b861-4382-904c-1862a98af130", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.11, "w": 0.28, "x": 0.65, "y": 0.35 }, "kind": "paragraph", "text": "In addition, a securities turnover tax on the sale or exchange of taxable securities may apply if: (i) the family office qualifies as a securities dealer in the capacity of a broker or dealer or (ii) trades on the family office's own account, provided it holds more than CHF10m of taxable securities. The tax rate is 0.15% for Swiss securities and 0.3% for foreign securities.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "5659682e-ec51-4172-80c8-d4ac1a869181", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.28, "x": 0.05, "y": 0.66 }, "kind": "paragraph", "text": "Due to Switzerland's federal system, taxes are levied on three different levels, the federal, cantonal and communal level. Therefore, the taxation of similar legal structures varies from canton to canton as some of the applicable regulations, and in particular tax rates, are not harmonized.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "5e07e280-7150-4d37-9ef8-15b266ce6aa5", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.28, "x": 0.35, "y": 0.68 }, "kind": "paragraph", "text": "In some specific circumstances, and providing certain prerequisites are fulfilled, it might be possible to benefit from tax privileges by establishing the family office either as a so-called domiciliary company, which is based in Switzerland only for administration purposes, without operating any kind of ordinary business, or as a mixed company that conducts its main business abroad with only rather marginal operations in Switzerland.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "9beac75c-d795-4f1b-a6d7-84407de6223b", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.09, "w": 0.28, "x": 0.65, "y": 0.25 }, "kind": "paragraph", "text": "A one-time capital duty of 1% is generally levied on capital increases or contributions to Swiss incorporated companies. However, tax planning is available around exemptions for (i) qualifying mergers, reorganizations and financial restructurings and (ii) other contributions within incorporations and capital increases up to the first CHF1m.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "c50b92bb-67a0-4e99-85cd-32553321d4be", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.05, "x": 0.05, "y": 0.64 }, "kind": "title", "text": "Tax", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "f72f09ab-8088-482a-bd26-36b85d510220", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [], "arcBeats": [], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }