aibloog industry news
The new capitalization interest rate will result in a lower wealth tax burden for owners of unlisted companies with retroactive effect from the 2021 tax period.
The market value of an investment in an unlisted company is determined in accordance with Circular Letter 28 (CL 28), which is published by the Swiss Tax Conference (SSK).
The so-called practitioner method is applied. The market value is determined from the average of the double-weighted capitalized earnings value and the single-weighted net asset value. The capitalized earnings value corresponds to the average net profit of the last two or three financial years (varies depending on the canton of domicile), which is capitalized at the respective interest rate.
The application of the higher capitalization rate consequently leads to lower capitalized earnings values, which in turn results in a lower property tax value. With the amendment to CL 28, the new capitalization rate will already apply from the tax period 2021. This change in practice is welcome for shareholders of unlisted participations, as they can expect a lower wealth tax burden.
We would like to illustrate the effect using the following example:
We look forward to exchanging ideas with you.
Consulting