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KPMG's Global Family Business Tax Monitor report points out that there are notable differences in the world with respect to the amounts of taxes paid when a business family goes from one generation to another. Colombia has granted tax and social benefits to this type of society.
Families planning to transfer their business from one generation to another must bear the costs of the tax, which can be quite high. The study KPMG's Global Family Business Tax Monitor indicates that there are great differences in the world .
The study makes sure that some countries offer substantial tax exemptions to help family businesses succeed and grow in the hands of the next generation, while in others transfers within families are taxed in the same way as for any other transaction .
For the particular case of Colombia, the income tax for the concept of inheritance is 10%, which will be applied to the value of goods received determined according to the rules established in the Fiscal Regulation, minus the equivalent of the first 3,490 UVT (equivalent to $ 115,714,000 for the 2018 taxation year)
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] In the case of the transfer of companies by death, the occasional gain will be determined on the fiscal cost of the shares which are transferred (value of acquisition) .
With regard to free transfers by ] inter vivos act no exemption is enshrined. The taxable base will be the value of the goods received, determined according to the rules established in the fiscal regulation .
"A thriving family business sector contributes to a vibrant economy, effective intergenerational transfers leave wealth in the hands of entrepreneurial families to invest in profit-generating activities, and this can help stimulate creation of jobs and innovation between generations " says Jesús Cbad, partner at KPMG Colombia
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In countries like Colombia, the informal economy is widespread and many businesses, including family-run businesses, operate outside of formal enterprise structures. The size of the informal economy creates a tax burden that frequently drives legitimate businesses to bear higher tax burdens . For informal businesses, the lack of books and official documents, bank accounts and government can hamper their profitability and growth prospects.
"Colombia has taken steps to integrate informal businesses into the structural legal economy, offering tax and social benefits, but more vigorous action may be needed for businesses to take advantage of this. 39 Informal economy be formalized: more convincing incentives and more technological resources for Dian, so that it achieves greater execution " says Maria Consuelo Torres, tax and legal services member of KPMG in Colombia.
Overall influence of taxes on family corporations
- The tax rules governing transfers of family businesses on a global and regional scale vary considerably .
- Canada, Venezuela and Japan are some of the countries that impose the highest taxes on family business transfers at the time of death even after have claimed all tax exemptions available.
- For transfers in the life of the owner of the family business, Canada, Venezuela and Australia, are some of the countries it is that they pay more taxes .
- Countries such as China, New Zealand and Nigeria, do not apply any special tax on these transfers
- but can not be effective only when families encounter difficult conditions.
Family-owned businesses in the United States benefited from the most recent tax reforms . Thanks to this, the tax relief available for the transfers of these companies was considerably improved . The amount of the lifetime exemption for US citizens or residents has increased to more than $ 11 million, allowing homeowners to transfer more tax-free badets in the event of death or death. living gifts. The increase in tax benefits applies to fiscal years beginning after December 31, 2017, but will end after December 31, 2025 . After that, the availability of benefits is uncertain.
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