KPMG Enterprise report finds wide variation among countries worldwide.
Canada, Venezuela and Japan are among the countries that impose the highest taxes on family business transfers on death, even after you claim all available tax breaks. Other countries – like China, New Zealand and Nigeria
– apply no special taxes on these transfers at all. Between the extremes, tax outcomes vary widely. Western economies tend to impose higher taxes on family business transfers during lifetime and through inheritance, than emerging economies.
The report revealed 5 key developments which are likely to have a profound influence on family businesses around the world in the years to come as they develop their succession plans:
While commenting on the report’s findings in which our country participated, Mr. George Markides, Board Member and Head of Tax at KPMG in Cyprus, noted: “As far as the reality of the Cypriot family businesses is concerned, tax is not, at least for the moment, the deciding factor in planning for family business transfers. Succession plans are usually aligned with the family’s values and purpose.
“A sound business rationale should underpin all decisions concerning the future of the family businesses; early and informed planning is crucial in ensuring that both the business and the family will prosper for generations to come”, added Mr. Demetris Vakis, Board Member and Head of Family Business at KPMG in Cyprus.
The Global family business tax monitor is based on the findings of 65 countries, regions and jurisdictions who undertook a taxation review on two case studies providing details on how their local tax regulations would apply to each case. The study explores the effects taxation can have on the transfer of the business to family members upon inheritance and as a lifetime transfer (on retirement).
As with your family, your business doesn't stand still -- it evolves. Family businesses are unique and KPMG Enterprise Family Business advisers understand the dynamics of a successful family business and work with you to provide tailored advice and experienced guidance to help you succeed. To support the unique needs of family businesses, KPMG Enterprise coordinates with a global network dedicated to offering relevant information and advice to family-owned companies. We understand that the nature of a family business is inherently different from a non-family business and requires an approach that considers the family component.
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