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Increase in the foundation entry tax and the interim tax from 2026
The private foundation is an established instrument for wealth management. As an owner‑less legal entity it enables assets to be tied to a defined purpose and protected from fragmentation. From 1 January 2026 tax increases will apply.
The taxation of private foundations takes place on three levels (entry taxation, ongoing taxation, exit taxation). When assets are transferred to a private foundation, a foundation entry tax is payable. As the assessment base for the foundation entry tax the fair market value (market value) is normally used. If real estate is transferred, it is exempt from the entry tax; instead it is subject to an increased real‑estate transfer tax (equivalent to the foundation entry tax).
The foundation entry tax currently (for the year 2024) stands at 2.5% and will be raised to 3.5% with effect from 1 January 2026. The so‑called foundation entry tax equivalent (increased real‑estate transfer tax) is also increased from 2.5% to 3.5% from 1 January 2026, meaning that the real‑estate transfer tax on transfers of land will rise from a total of 6% to 7%.
Increase in the interim tax
A private foundation, as a legal person, is subject to corporation tax. Most income – such as income from agriculture and forestry, trade or rental and leasing – is taxed at the regular 23% corporation tax rate. Other income, in particular domestic and foreign bank interest, gains from the disposal of shareholdings and other realised capital gains as well as disposals of private real estate, is instead subject to the so‑called interim tax. The interim tax is to be understood as a “pre‑taxation”. When a private foundation makes transfers to domestic beneficiaries, those transfers reduce the interim‑tax assessment base for the year. If the transfers exceed the interim‑taxable income of a year, a credit is created for the interim tax paid in previous years, which is recorded on an evidential account.
Since 2024 the interim tax has been 23% (2023 24%). This will now be raised to 27.5% from the calendar year 2026.
Transfers from private foundations to beneficiaries will also, from 1 January 2026, continue to be subject to the 27.5% capital gains tax, which the private foundation must withhold at the time of receipt and remit to the tax office. Such transfers can also continue to reduce the assessment base of the interim tax.
Tip
Because the foundation entry tax will increase from 1 January 2026, transfers to private foundations will be more heavily taxed in the future. If transfers to private foundations are being considered, early planning is advisable in order to be able to make the transfers in 2025.
The foundation entry tax currently (for the year 2024) stands at 2.5% and will be raised to 3.5% with effect from 1 January 2026. The so‑called foundation entry tax equivalent (increased real‑estate transfer tax) is also increased from 2.5% to 3.5% from 1 January 2026, meaning that the real‑estate transfer tax on transfers of land will rise from a total of 6% to 7%.
Increase in the interim tax
A private foundation, as a legal person, is subject to corporation tax. Most income – such as income from agriculture and forestry, trade or rental and leasing – is taxed at the regular 23% corporation tax rate. Other income, in particular domestic and foreign bank interest, gains from the disposal of shareholdings and other realised capital gains as well as disposals of private real estate, is instead subject to the so‑called interim tax. The interim tax is to be understood as a “pre‑taxation”. When a private foundation makes transfers to domestic beneficiaries, those transfers reduce the interim‑tax assessment base for the year. If the transfers exceed the interim‑taxable income of a year, a credit is created for the interim tax paid in previous years, which is recorded on an evidential account.
Since 2024 the interim tax has been 23% (2023 24%). This will now be raised to 27.5% from the calendar year 2026.
Transfers from private foundations to beneficiaries will also, from 1 January 2026, continue to be subject to the 27.5% capital gains tax, which the private foundation must withhold at the time of receipt and remit to the tax office. Such transfers can also continue to reduce the assessment base of the interim tax.
Tip
Because the foundation entry tax will increase from 1 January 2026, transfers to private foundations will be more heavily taxed in the future. If transfers to private foundations are being considered, early planning is advisable in order to be able to make the transfers in 2025.