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Our dedicated advisors in the ‘Family Owned Business & Private Wealth’ team focus on a daily basis on the needs of (international) family-owned businesses in our four home markets Belgium, the Netherlands, Luxembourg and Switzerland.
Trends and developments
Family-owned businesses and their shareholders face many developments that may impact them on the tax or legal front. National, international and European social, economic and legal developments rapidly succeed one another. In the area of law and tax topics such as preventing abusive, fair share tax contributions, climate adaptation and transparency are on the agenda.
In recent years, the taxation of the (Ultra) High Net Worth Individuals ((U)HNWIs) has attracted increasing attention. In many countries, education, healthcare and infrastructure are require further or increasing investments. Additional tax revenue is often needed for that. In addition, wealth inequality has increased worldwide. Support for additional taxation of (U)HNWI’s is increasing as well.
Blueprint for an internationally coordinated minimum tax for UHNWIs
Recently, the EU Tax Observatory presented a blueprint for an internationally coordinated minimum tax on UHNWIs. The blueprint was commissioned by the Brazilian presidency of the G20 ahead of a summit in July 2024. The blueprint includes a baseline proposal that individuals with more than $1 billion in wealth would be required to pay a minimum amount of tax annually, equal to 2% of their wealth. In the blueprint, it is noted that the minimum tax could be extended to centimillionaires, and consideration is given to start the minimum tax at USD 100 million in wealth. Following the summit, the G20 issued a declaration in which they commit to engage cooperatively to ensure that UHNWIs are effectively taxed, while fully respecting tax sovereignty. Cooperation could involve exchanging best practices, encouraging debates around tax principles, and devising anti-avoidance mechanisms, including addressing potentially harmful tax practices.
Tax regimes for (U)HNWI’s under pressure
The sentiment that resulted in the blueprint for a global UHNWI minimum tax is also affecting tax regimes for this group across Europe. For example, the United Kingdom (UK) recently announced major tax reforms in their Spring 2024 Budget. The proposed changes are relevant for natural persons living in the UK but not domiciled there (so-called "non-doms" or RNDs). The current “remittance basis” of taxation, whereby only UK tax is payable on non-UK income and profits when transferred to the UK, would be abolished. From April 6, 2025, a new regime for foreign income and profits with a term of four years would be introduced. The proposed reforms would also impact inheritance taxes and trusts.
In addition, on August 7, 2024, the Italian Council of Ministers approved a decree increasing the flat-rate tax on income (flat tax) earned abroad by natural persons who move their tax residence to Italy from 100,000 euros to 200,000 per year. It should be noted that this doubling of tax only applies to future Italian residents. Taxpayers who already benefit from the HNWI regime and benefit from a flat tax amounting to 100,000 euros can continue to do so (at least taking into account the maximum term of 15 years).
Similar trends are visible in other European countries. In the Netherlands, the government has for example gradually decreased the benefits of the Dutch expatriate regime (30%-regime) over the years.
Developments in Belgium, the Netherlands, Luxembourg, Switzerland
What has 2024 brought thus far and what will the coming months bring for Belgian, Dutch, Luxembourgish and Swiss family-owned businesses from a tax and legal perspective? We would like to share various themes with you to consider, if relevant in your situation.
Belgium
The Netherlands
Luxembourg
Switzerland
Contact
Would you like more information having read this news article? Maybe an informal introductory meeting would be of interest? Please contact your Loyens & Loeff advisor or get in touch with one of our dedicated advisers in the Family Owned Business & Private Wealth team. We will be happy to help you.
