When setting up complex business structures like Economic Ownership Rights (EER), Foundation for Administration Offices (STAK), and Separation of Control and Economic Ownership (SAR), understanding the tax implications is crucial. In this blog post, we'll discuss the tax implications of these structures and what to consider when contemplating them.

Economic Ownership Rights (EER)

EER involves separating economic ownership from legal ownership, leading to significant tax implications:

• Income Tax: The economic owner is typically liable for tax on the generated income, affecting their tax obligations.
• Wealth Tax: The value of economic ownership may impact the owner's wealth tax. Understanding its calculation and reporting is crucial.
• Transfer Tax: If EER involves real estate transfers, transfer taxes may apply. Knowing how these taxes are assessed and who is responsible is important.

Foundation for Administration Offices (STAK)

A STAK manages shares in a company, entailing various tax implications:

• Corporate Tax: The STAK might be subject to corporate tax on profits from managed shares.
• Dividend Tax: Dividend tax may apply to payouts to shareholders if the STAK receives dividends.
• Transfer Tax: Transferring shares to a STAK might incur transfer taxes, depending on jurisdiction-specific laws.

Separation of Control and Economic Ownership (SAR)

SAR separates economic ownership and control, leading to tax implications:

• Income Tax: The economic owner is typically taxed on income generated, while the legal owner pays tax on control-related income.
• Wealth Tax: The value of economic ownership may impact the owner's wealth tax.
• Transfer Tax: Transferring economic ownership might trigger transfer taxes.

Conclusion

Establishing Economic Ownership Rights (EER), Foundation for Administration Offices (STAK), or Separation of Control and Economic Ownership (SAR) demands a thorough understanding of tax implications. Tax laws vary by jurisdiction, hence seeking professional tax advice is wise. Gaining comprehensive insights into tax implications ensures effective management of these complex structures, meeting your business needs. The right advice and planning can minimize tax risks and maximize benefits. Share Council offers expert guidance in structuring your company. Schedule a brief call with our product and design manager to explore how we can assist your business.