Business wealth (Switzerland)

Business wealth (fortune commerciale) is a Swiss tax concept distinguishing assets used in a business activity (commercial assets) from private assets. Under Swiss cantonal tax law, income derived from commercial assets (capital gains on sale, depreciation recapture) is generally subject to income tax, whereas capital gains on private assets held by individuals are typically tax-exempt. The classification of assets as commercial or private has significant implications for the tax treatment of business sales, particularly for entrepreneurs selling their companies or real estate used in their business. This distinction is a key consideration in Swiss business sale structuring.

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Example: a Swiss entrepreneur sells a manufacturing building used in his business for CHF 4.5 million (book value CHF 1.8 million). Since the building is classified as commercial wealth, the CHF 2.7 million gain (depreciation recapture + capital gain) is subject to cantonal income tax — unlike a private property sale, which would have been tax-exempt. Proper structuring in advance of the sale could have converted the asset to private wealth, achieving a tax saving of approximately CHF 500,000.

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Hectelion analyses fortune commerciale classification in Swiss business sale structuring to optimise the after-tax proceeds for selling entrepreneurs.