Family-owned businesses account for roughly two-thirds of businesses globally and as many as 90 percent and more of businesses in individual countries. However, despite the value they bring in so many ways, only about 30 percent of family-owned businesses survive into the second generation, while only 12 percent are still operating into the third generation.
Transferring a family business from one generation to the next can often be challenging because of complicated interpersonal dynamics and complex tax systems. Tax implications can vary widely depending on where the business is located. Some countries offer substantial tax breaks to help family businesses succeed and grow in the hands of the next generation. In other countries, tax transfers within a families are treated in the same way as any other transaction, creating significant costs.
Another great challenge is what happens to the family business when the head of the business passes away or decides to retire. It has always been a burning question for business owners and has become even more urgent with the impact of COVID-19.
KPMG Private Enterprise’s Global Family Business Tax Monitor 2020 examines the differences in tax implications across 54 countries, regions and jurisdictions and how they can influence the successful transition of family businesses from one generation to the next. The report also features insights into global trends that are expected to alter the tax landscape for family business transfers in the coming years, along with key succession planning points that business families should consider in the light of the COVID-19 pandemic.
Download the KPMG Private Enterprise Global Family Business Tax Monitor 2020 report to gain an in-depth perspective on the changing tax environment for family business around the world.