Each Tax Due Diligence (Tax DD) must be tailored to the respective buyer or purchase.
The general conditions of taxation or the taxation agreement, if applicable, have an impact on the economic viability of an investment. The facts are so different in practice that it suffices to provide a rough outline of the taxation issues:
The relevant factors are
1. The taxable person / entity
- The buyer
- Legal entities
- Place of residence / domicile
- In Switzerland
- Double taxation agreement
- Tax ruling/ taxation agreement
2. The taxable property / items
- Direct acquisition (asset deal)
- Property taxes
- Inheritance and gift taxes
- Indirect acquisition of real estate (share deal): the property is held by a legal entity (company limited by shares).
- Capital tax
- Profits tax
- Property tax
Tax issues are flexible, which is why the Tax DD plays such a significant role in shaping the taxation element of the transaction structure.