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Opalesque Exclusive: Switzerland still discussing reduced taxes for hedge funds, date is nearing
From the Opalesque team: Switzerland is gearing up to reinforce its financial place in the world. Swiss paper Le Temps reported on Saturday that hedge fund managers and private equity managers will be significantly less taxed. "The aim is to compete with London and New York," said Federal Director of Finance Peter Siegenthaler and Swiss Bankers' Association director Urs Roth to Le Temps. These two structures deduct 15 to 20% from their earnings for taxes. In Switzerland, the total taxation of high-flying financiers can be up to 40 - 50%.
No legislative modification will be necessary to improve the hedge funds' tax regime. It will be simply dealt with by a circular. Peter Siegenthaler's service plans to tax in a different way: carried interest, instead of being considered wholly as revenue, will be in part classified as capital earnings (which are not taxable). The so-called AFF circular still needs to be discussed by the cantonal finance directors, so there is no set date for its inception yet.
By the end of 2007, Switzerland accounted for almost 120 hedge funds and 74 single managers. However, less than ten are domiciled in the country.
Related article: Swiss to introduce tax breaks for hedge funds, aims to become third financial centre
From FT.com: Switzerland plans to simplify and harmonise its tax rules for hedge funds and private equity grou...................... To view our full article Click here
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