Milena Palikarova, BA

Zugimpex Group

How to move money and assets tax free

from corporate to private level

www.zugimpex.com

Zugimpex Group:

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Zugimpex Group

Cham, Zug

Switzerland

Bratislava

Slovakia

San Gwann Malta

Corporate

Services

Consulting

Services

Investment

Services

Tax planning for target groups:

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For corporations:

Reduce the total corporate tax rate

Increase the share price

For private enterpreneurs:

Transfer money tax free from corporate to private level

Zugimpex Group

Motives to take money out of the company:

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Private consumption

Private investment (real estates, stocks, bonds)

Limitation of risk exposure, Diversification

Asset protection structures

Succession Planning and Inheritance

Other Payments

Zugimpex Group

How money was taken out in the past

becomes risky and expensive

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Example: Swiss AG fiduciary: invoicing

Private owner: invoice to Swiss AG

Private owner: Secret Swiss Bank account

(sometimes: Mixer Company between)

Problems: Regulations of Fiduciaries

Compliance of Banks

Information Exchange

Zugimpex Group

How to move money and assets from

corporate to private level (1):

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Check tax laws in country of residence and DTT !

(intermediary holding if no DDT/ unfavourable DTT)

1. Partnership structures

a) Limited Partnership

b) General Partnership

c) Partnership with branch in low taxed country

d) Silent Partnership / Participating Loan

Zugimpex Group

How to move money and assets from

corporate to private level (2):

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Check tax laws in country of residence and DTT !

(intermediary holding if no DTT/ unfavourable DTT)

2. Loan financing by the shareholder

3. Capital Gains instead of dividends

4. Foundation- Holding with tax free beneficiaries

5. Change of residence

6. Combinations, if applicable:

A. Negative progression – use foreign losses twice

B. Limited obligations to keep accounts

Zugimpex Group

Slovakia – special tax laws

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Tax free transfer of profits

from corporate to private level

No dividend tax

Liberal business laws

Reasonable banks

Special legal structure (k.s. = komanditní společnost = limited partnership)

(v.o.s.= veřejná obchodní společnost = general partnership)

Zugimpex Group

Slovak Structures to take money private

Limited partnership: k.s. (with GP s.r.o.)

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In Slovakia:

GP (General Partner) is taxed transparent (tax declaration at private level, in the year profit is made)

LP (Limited Partner) is taxed intransparent (= at corporate level; profit distribution like dividend)

In Residence Country:

Business income „only“

taxable in Slovakia

(art 7 DTT)

Transfer from corporate to

private level

cross border

Alternative structures:

v.o.s. owning a s.r.o.

GP of k.s.

Zugimpex Group

Selected applications in tax planning:

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1. Service / trading companies

2. Holding for foreign shareholders

3. Settle a loan from companies to owners

4. Use Swiss benefits without Swiss obstacles

5. MT- SK – An efficient EU structure

Zugimpex Group

1. Service / Trading companies

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Transfer functions

Create substance with acceptable costs

Calculate a reasonable level of tax inspections

Outsource functions to reduce tax base

Enjoy good traffic connections, long opening hours and an

entertaining town

Apply for EU residence

Zugimpex Group

2. Holding for foreign shareholders

Make a subsidiary with Slovak Holding:

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No tax on incoming dividends

No withholding tax on outgoing dividends

No tax on dividends at the private level

Make a holding for existing companies:

Transfer company ownership tax free into a Slovak k.s. using the EU merger directive

Declare dividends to Slovak Holding

Payout from Slovak Holding

Zugimpex Group

3. Settle a loan to owners

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Situation: owner took several times a loan from a limited

liability company to avoid dividend tax

Loan gets bigger and bigger, interests etc.

Owner is therefore exposed to higher risk, too

make a Slovak Holding

declare dividends (Holding takes over the receivable)

offset the loan with payout from Slovak Holding

Zugimpex Group

4. Swiss benefits without obstacles

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Slovak company with Swiss branch

Low capital requirements for s.r.o.

Payment from branch to main seat is no dividend avoid

Federal Swiss withholding tax

Liberal Slovak rules for nominee

Reasonable banks

Zugimpex Group

CH - advantages CH - disadvantages

Swiss Image Swiss regulations/ compliance

Swiss Law Swiss withholding tax

Swiss Market Swiss costs

Stability High Capital requirements

5. The most efficient EU structure

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Slovak Holding, Malta Subsidiary

Structure:

Malta LLC (5%)

k.s. in Slovakia (0%)

(alternatives: GP or s.r.o./ v.o.s)

Private person: Art 7 DTT (0%, attention: progression)

5% total tax

acceptable costs

White income at your country of residence

Zugimpex Group

Milena Palikarova, BA

Zugimpex Group

Smart people will always have advantages! - this will continue -

Thank you !

www.zugimpex.com