The KPMG report concludes that while tax regimes around the world vary greatly, in general, countries are supporting and encouraging investment and growth in family businesses, with low tax liabilities for the transfer of businesses to the next generation upon retirement or inheritance. Where tax is due, various mechanisms exist allowing for payments to be diminished or deferred.
The report, a sequel to the 2014 KPMG European Family Business Tax Monitor, also examines how a higher tax burden may influence a business to relocate.
“Although advanced economies placed a higher tax burden on family business overall, there were also more extensive and generous exemptions there than in countries with emerging markets,” says Christophe Bernard, Global Head of KPMG Enterprise, Family Business. “One impact might be that in countries where the tax burden is overall highest, family businesses may consider the option to relocate to a neighboring country with lower exemptions which could impact local economies.”
Tax regimes around the world vary greatly (from €0 to over €4.5 million for transfer of family business through inheritance, and from €0 to over €5 million for transfer of family business on retirement; for a business valued at €10 million), generally, countries are supporting and encouraging investment and growth in family business:
The Global Family Business Tax Monitor is based on the findings of 42 countries who undertook a taxation review on two scenarios for a Family Business valued at €10 million. The Monitor has explored the effects taxation can have on the transfer of the business to family members upon inheritance and as a lifetime transfer (on retirement). The 42 countries engaged in the study are: Australia, Austria, Belgium, Bosnia & Herzegovina, Brazil, Canada, China, Croatia, Cyprus, Czech Republic, Estonia, Finland, France, Germany, Greece, India, Ireland, Isle of Man, Italy, Jamaica, Japan, Jordan, Latvia, Lithuania, Luxembourg, Malta, Mexico, Netherlands, Norway, Pakistan, Poland, Portugal, Senegal, Serbia, Slovakia, South Africa, Spain, Sweden, Switzerland, Turkey, UK, USA.
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