From the 2018 tax period onwards, the Zurich Cantonal Tax Office will change its practice regarding the tax deductibility of flat-rate fees for third-party managed custody assets in excess of CHF 2 million.
As asset management costs, CHF 6,000 plus half of the flat-rate fee reduced by the amount of CHF 6,000 can now be deducted.
To this end, the directive of the cantonal tax office on the deductibility of costs for the management of securities held as private assets was amended. This was triggered by a decision of the Tax Appeal Court of the Canton of Zurich on 31 January 2017 (DB.2016.129, ST.2016.153).
According to an announcement by the Cantonal Tax Office of Zurich dated 29 August 2017, the current practice for asset management costs for securities managed by third parties up to CHF 2 million remains unchanged: Instead of proof of the deductible costs actually paid, the tax value of the securities of private assets managed by third parties can still be deducted at a flat rate 3‰ from the tax value of the securities of private assets managed by third parties, up to a maximum of CHF 6,000, for the safekeeping and administration of securities (excluding loans and bank deposits of all kinds) and for the preparation of the tax register by third parties.
The new practice affects third-party managed custody assets in excess of CHF 2 million, for whose management a flat fee is charged, which cannot be divided into deductible and non-deductible costs. In these cases, a maximum of CHF 6,000 plus half of the flat-rate fee reduced by the amount of CHF 6,000 can now be deducted.
The adapted directive of the cantonal tax office can be downloaded here.
