Tax optimization is a legal knowledge essential to the international investor. But the private individual may face counter measures from the administrations in a competitive environment between the European jurisdictions. Propaganda about the end of banking secrecy and tax havens are another reason to consider tax planning solutions.
Tax optimization allows private investors to realize substantial tax savings in a legal way. The investor may use a tax treaty in force with its country of residence and live abroad for half of the year. In such as, the investor will pay a reduced rate in the alternative country of residence, on the income from the financial products and royalties. The alternative is a life insurance contract to shelter the assets and so far, the profits.
Tax treaty between France and other European countries (UK, Belgium, Germany, Italy, Luxembourg, and Sweden) and Mauritius is available with the formation of a resident Mauritius company and the transfer of financial assets on this structure, which could be managed in Switzerland. Financial earnings, capital gains and capital will be taxed at 3% after a 6 month period, and a Tax Certificate will be delivered. The investor should relocate in Mauritius for six months every year to benefit from the tax treaty.
Other tax planning options
like the
Mauritius IRS (Integrated Resort Scheme) consists to buy a
property in a real estate residence showing the IRS agreement. A
residence permit is available upon purchasing of the property,
from €500,000 minimum. Residential taxation is 15% on the
revenues in Mauritius, less 80% for the citizen of the countries
with a tax treaty in force. No taxation is levied on income
outside Mauritius.
Life insurance of EU jurisdiction is an option to outsource financial assets and profit of tax savings. A contract is subscribed and the assets are sheltered in it. Therefore, there is compliance with the authorities, in association with legal protection and tax benefits. Financial assets as well as real estate assets are acceptable in this tax planning process which does not need relocation. This will apply from €250,000 of assets.
International tax planning is a serious process and should not be establish in a amateurish way to be valid. Any installation mistake could lead to administrative trouble and fines which are at the opposite of the initial will. This is the reason why tax planning need professional advices and consulting. Each case is specific according to the origin country; the family, professional and tax situation as well as the category of income to be optimized: salaries; dividends; interests or royalties.
Phone: +41 78 873 58 45
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A tax treaty in force between Switzerland and Luxembourg. This treaty is useful to investor with royalty income in Luxembourg to avoid withholding taxes. In addition, the royalties collected in Luxembourg will pay no tax in Switzerland if they are transferred on a limited or a public type of company. The departure of French high net worth residents to Switzerland is booming. After the start of hunting for wealthy taxpayers holding unreported assets abroad, the flow of French residents settling in Switzerland has rise by three times in a few weeks. This exodus represents a singnifiant failure of the French concept of "tax shield" launched to counteract the European jurisdictions with low tax schemes.
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