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steuersystematisch realisiert

English translation: unrecognised gains deemed to be realised for tax purposes

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GLOSSARY ENTRY (DERIVED FROM QUESTION BELOW)
German term or phrase:steuersystematisch realisiert
English translation:unrecognised gains deemed to be realised for tax purposes
Entered by: Kim Metzger
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15:54 Jul 4, 2007
German to English translations [PRO]
Bus/Financial - Law: Taxation & Customs
German term or phrase: steuersystematisch realisiert
This is from a letter from a large Swiss-based corporation to the Swiss tax authorities discussing a planned merger and requesting an assessment of the tax implications. I've got hidden assets for stille Reserven. Your suggestions will be appreciated.

Steuerliche Beurteilung fusionierte Gesellschaft / keine steuersystematische Realisation

Zurzeit ist die exakte Struktur der Geschäftstätigkeit der fusionierten XX AG noch nicht im Detail bestimmt, weshalb wir uns erlauben, hinsichtlich allfälliger Steuerprivilegien gegebenenfalls in einem späteren Zeitpunkt wieder an Sie zu gelangen. Sollte sich zeigen, dass die fusionierte XX AG vorteilhafter besteuert würde, als dies momentan bei den bestehenden Gesellschaften der Fall ist, werden wir über allfällig steuersystematisch realisierte stille Reserven - rückwirkend auf den entsprechenden Fusionszeitpunkt - abrechnen.
Kim Metzger
Mexico
Local time: 17:08
(unrecognised gains deemed to be) realised for tax purposes
Explanation:
Swiss tax law distinguishes between three types of realisation of gains: 'echte Realisation' (eg the actual sale of an asset for cash), 'buchmässige Realisation' (eg changes in accounting policies as a result of which previously unrecognised gains are reflected in the accounts despite the absence of an actual transaction) and 'steuersystematische Realisation'.

The latter is essentially a tax-avoidance provision and occurs when a transaction giving rise to the realisation of a previously unrecognised gain is deemed to have occurred by the tax authorities. This applies in particular when, typically as a result of a takeover or other restructuring, gains which would otherwise have been subject to tax are transferred or reclassified in such a way that the unrealised gain will now not be subject to tax. Examples include transferring assets from a company to a private individual or the relocation of a company's registered office in another tax jurisdiction.

For 'allfällig steuersystematisch realisierte stille Reserven' I would suggest 'any previously unrecognised gains realised for tax purposes' or '...deemed to be realised by the tax authorities' or some snappier formulation of the same essential reading.

We often talk about gains 'crystallising' as a result of tax events, but I suspect that's UK speak.

'Grundsätzlich lassen sich drei Tatbestände der Realisierung unterscheiden, nämlich die echte, die buchmässige und die steuersystematische Realisierung'
http://www.gerichte.sg.ch/home/dienstleistungen/rechtsprechu...

'Eine steuersystematische Realisation liegt vor,
wenn stille Reserven in Abweichung der korrekten
Handelsbilanz infolge Überführung in
einen Bereich, welcher eine gleichartige Besteuerung
der stillen Reserven später nicht mehr zulässt,
zwecks Besteuerung aufgedeckt werden...Es wird so sichergestellt, dass
die stillen Reserven lückenlos erfasst werden.'
http://www.omnitax.ch/pdf_omnitax/JunodSteuersystem.pdf

http://www.isb.uzh.ch/studium/courses04-05/pdf/0339_handout_...

--------------------------------------------------
Note added at 19 hrs (2007-07-05 11:41:06 GMT)
--------------------------------------------------

a tax-avoidance > an anti-avoidance
Selected response from:

Kieran McCann
United Kingdom
Local time: 23:08
Grading comment
Thanks, Kieran, Robin and everybody else. Normally, I stay away from financial docs, but this one was otherwise pretty general.
4 KudoZ points were awarded for this answer

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Summary of answers provided
4 +1(unrecognised gains deemed to be) realised for tax purposesKieran McCann
3tax benefits as a result of hidden reserves
SusieZ
3Tax system structured realized capital
IamJessika
1declared/evaluated in accordance with tax lawsxxxOlaf


Discussion entries: 1





  

Answers


18 mins   confidence: Answerer confidence 3/5Answerer confidence 3/5
Tax system structured realized capital


Explanation:
In this context, it appears there is some sort of capital or corporate hidden assets being discussed.

IamJessika
Local time: 18:08
Native speaker of: Native in EnglishEnglish, Native in GermanGerman
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39 mins   confidence: Answerer confidence 1/5Answerer confidence 1/5
declared/evaluated in accordance with tax laws


Explanation:
Finance English is not really my forte, but I believe that "steuersystematisch" simply means that the hidden assets or hidden reserves are declared/taxed in accordance with the Swiss tax laws.


    Reference: http://www.sz.ch/cms/fileadmin/user_upload/wirtschaftsfoerde...
xxxOlaf
Local time: 00:08
Native speaker of: Native in GermanGerman
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41 mins   confidence: Answerer confidence 3/5Answerer confidence 3/5
tax benefits as a result of hidden reserves


Explanation:
from www.swissnetwork.com

Transformation of an existing company into a tax privileged company



A transformation of an existing company that is ordinary taxed into a company that benefits from a special taxation status basically leads to a taxation of the difference between the book value of the assets and liabilities and the fair market value of these items. This difference is generally referred to as “hidden reserves”. This taxation occurs as no or only a limited income taxation of the hidden reserves is possible on the cantonal / communal tax level after a tax privilege is granted.

In several cantons, the taxation of the hidden reserves can be postponed or potentially eliminated by way of a so-called “revers”, i.e., agreement with the tax authorities to postpone taxation until a later date or event takes place, or an agreement that the right to taxation lapses after a certain time period if there is not a change of circumstances. In the revers, the amount of the hidden reserves will be agreed on as well as the taxation of the hidden reserves upon realization by way of a future sale.



SusieZ
United States
Local time: 18:08
Native speaker of: English
PRO pts in category: 4

Peer comments on this answer (and responses from the answerer)
neutral  Kieran McCann: I think this is about potential tax liabilities not benefits//not if you haven't actually received any cash/assets and the tax people then send you a bill as well
18 hrs
  -> but the term in the text is "realisierte", wouldn't that be a benefit and not a liability? My mind is racing, trying to work your comment in....
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19 hrs   confidence: Answerer confidence 4/5Answerer confidence 4/5 peer agreement (net): +1
(unrecognised gains deemed to be) realised for tax purposes


Explanation:
Swiss tax law distinguishes between three types of realisation of gains: 'echte Realisation' (eg the actual sale of an asset for cash), 'buchmässige Realisation' (eg changes in accounting policies as a result of which previously unrecognised gains are reflected in the accounts despite the absence of an actual transaction) and 'steuersystematische Realisation'.

The latter is essentially a tax-avoidance provision and occurs when a transaction giving rise to the realisation of a previously unrecognised gain is deemed to have occurred by the tax authorities. This applies in particular when, typically as a result of a takeover or other restructuring, gains which would otherwise have been subject to tax are transferred or reclassified in such a way that the unrealised gain will now not be subject to tax. Examples include transferring assets from a company to a private individual or the relocation of a company's registered office in another tax jurisdiction.

For 'allfällig steuersystematisch realisierte stille Reserven' I would suggest 'any previously unrecognised gains realised for tax purposes' or '...deemed to be realised by the tax authorities' or some snappier formulation of the same essential reading.

We often talk about gains 'crystallising' as a result of tax events, but I suspect that's UK speak.

'Grundsätzlich lassen sich drei Tatbestände der Realisierung unterscheiden, nämlich die echte, die buchmässige und die steuersystematische Realisierung'
http://www.gerichte.sg.ch/home/dienstleistungen/rechtsprechu...

'Eine steuersystematische Realisation liegt vor,
wenn stille Reserven in Abweichung der korrekten
Handelsbilanz infolge Überführung in
einen Bereich, welcher eine gleichartige Besteuerung
der stillen Reserven später nicht mehr zulässt,
zwecks Besteuerung aufgedeckt werden...Es wird so sichergestellt, dass
die stillen Reserven lückenlos erfasst werden.'
http://www.omnitax.ch/pdf_omnitax/JunodSteuersystem.pdf

http://www.isb.uzh.ch/studium/courses04-05/pdf/0339_handout_...

--------------------------------------------------
Note added at 19 hrs (2007-07-05 11:41:06 GMT)
--------------------------------------------------

a tax-avoidance > an anti-avoidance

Kieran McCann
United Kingdom
Local time: 23:08
Works in field
Native speaker of: English
PRO pts in category: 70
Grading comment
Thanks, Kieran, Robin and everybody else. Normally, I stay away from financial docs, but this one was otherwise pretty general.
Notes to answerer
Asker: Thank you, Kieran. And "keine steuersystematische Realisation" in the heading?


Peer comments on this answer (and responses from the answerer)
agree  RobinB: Excellent! One of my favourite UK tax-speak phrases is about "uncrystallised gains evaporating" (it's an IHT thing).
29 mins
  -> thanks Robin, if only I could persuade HMRC that those apparent profits in fact evaporated some time ago...
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Changes made by editors
Jul 4, 2007 - Changes made by Steffen Walter:
Field (specific)Finance (general) » Law: Taxation & Customs


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