Pressure rises on private equity bosses’ tax

by Nick Huber

More from this author

15 Feb 2012

  • Comments

PRESSURE IS rising across the globe to raise taxes for private equity bosses, with German and Swedish authorities pushing for legislative changes and a leading US pension fund investor calling the 15% rate in America "indefensible".

Both the German and Swedish governments are considering proposals to lift tax rates for on the industry's profit-sharing schemes, in what private equity executives say is likely going to trigger similarly sweeping changes across Europe, the Financial Times reported.

In the US, the comments about the industry's taxes by Joe Dear, investment chief of Californian pension fund Calpers, come as US President Barack Obama is demanding the wealthy pay more.

"General partners [in private equity companies] should recognise that tax treatment of their income has become indefensible," told the FT on Monday.

Calpers is among the world's largest investors in private equity funds and it has investments with Blackstone, Carlyle and KKR. In Europe, buy-out managers enjoy preferential tax treatment on profit sharing schemes that are their main source of income in most countries, FT research shows.

But in Germany, four regional governments are studying a plan to remove an exemption clause which allows only 60% of a private equity manager's profits to be taxed.

In Sweden, tax authorities are pushing key executives from Nordic Capital, IK and Altor to retrospectively pay a 56 per cent rate of income tax - plus a 40% penalty tax on past profits instead of the 30% capital gains rate that they have already paid.


Visitor comments

blog comments powered by Disqus

Add your comment

We won't publish your address

By submitting a comment you agree to abide by our Terms & Conditions

Your comment will be moderated before publication

  • Send


Financial Planner

The Ministry of Defence Surgeon General’s (SG) Finance Department, Lichfield, Staffordshire, Permanent, Full Time, £ £30,008




Get the latest financial news sent directly to your inbox

  • Best Practice
  • Business
  • Daily Newsletter
  • Essentials


Search for jobs
Click to search our database of all the latest accountancy roles

Create a profile
Click to set up your profile and let the best recruiters find you

Jobs by email
Sign up to receive regular updates with the latest roles suitable for you



Why budgeting fails: One management system is not enough

If budgeting is to have any value at all, it needs a radical overhaul. In today's dynamic marketplace, budgeting can no longer serve as a company's only management system; it must integrate with and support dedicated strategy management systems, process improvement systems, and the like. In this paper, Professor Peter Horvath and Dr Ralf Sauter present what's wrong with the current approach to budgeting and how to fix it.


iXBRL: Taking stock. Looking forward

In this white paper CCH provide checklists to help accountants and finance professionals both in practice and in business examine these issues and make plans. Also includes a case study of a large commercial organisation working through the first year of mandatory iXBRL filing.