SWISS REAL ESTATE TAXATION 1. Acquisition of the

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SWISS REAL ESTATE TAXATION 1. Acquisition of the real estate investment Selling of a real estate property under VAT regime In principle the selling of a land is not subject to VAT. The seller can opt to be subject to VAT if the buyer is a taxpayer or a person who is not using the building for private purposes. The VAT standard rate: 0% on building but option at 8% is possible. Transfer tax and others acquisition costs The rate of the transfer tax of a residential property varies depending of the cantons in which the transaction is made: from 0% to 3.3%. In most French-­‐speaking cantons the acquisition of shares of a real-­‐estate company is not subject to the cantonal real estate transfer tax, while in most German-­‐speaking cantons, the sale of a real estate company is considered as a direct sale of real estate and is subject to transfer tax. 2. Holding the real estate investment Rental activity In principle, VAT or lease tax are not applicable but there is a possibility to opt to levy VAT at 8% on rental payments for commercial real estate. Distribution of profit Dividend distributions to a foreign shareholder are subject to 35% withholding tax At the federal level, a person receiving dividends from a company may partially avoid the taxation on this revenue by way of a special deduction (40% deduction for qualifying “private” participation and 50% for qualifying “commercial” participation). Companies are also liable for the annual cantonal capital tax which is levied on their equity (from 0% to 0.4% depending on the canton). Some cantons levy an annual immovable property or land tax (from 0.05% to 0.2%). 3. Selling the real estate investment Autorisation d’établissement du Ministère des Finances luxembourgeois n° 26/12 en tant que Professionnel du
Secteur Financier agréé par la Commission de Surveillance du Secteur Financier luxembourgeoise.
N° R.C.S. Luxembourg B 94364
TVA LU 19788437
ING Luxembourg S.A.
IBAN LU72 0141 3413 6050 0000
BIC CODE : CELLLULL
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18 rue Robert Stümper • L-­‐2557 Luxembourg T +352 26 38 92 40 • F +352 26 38 92 41
www.finimmo.com
Sale of a real estate property Capital gains are considered as part of the taxable income. Depending on the canton in which the real estate is situated, its sale is subject to either the ordinary cantonal income tax or to special and separate real estate capital gains tax. Sale of the shares of a real estate oriented company At the federal level, the sale of shares in a real estate oriented company by a corporate seller shall be treated as a movable gain which may benefit from the holding reduction if certain conditions are met (10% holdings and 12 months’ minimum duration). At the cantonal level, the situation depends of the canton in which the company is based. The sale may be treated as either movable capital gain from the sale of shares (and benefits the holding reduction or holding exemption) or as a real estate capital gain subject to a special and separate real estate capital gains tax. The present document only has an informative purpose, and constitutes neither a tax advice, nor any part of a contract or an offer. Autorisation d’établissement du Ministère des Finances luxembourgeois n° 26/12 en tant que Professionnel du
Secteur Financier agréé par la Commission de Surveillance du Secteur Financier luxembourgeoise.
N° R.C.S. Luxembourg B 94364
TVA LU 19788437
ING Luxembourg S.A.
IBAN LU72 0141 3413 6050 0000
BIC CODE : CELLLULL
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