Foundations can obtain exemptions on income and capital gains taxes (cantonal and federal) if they irrevocably pursue charitable aims, or goals that are in the public interest. In order for a foundation aim to be considered charitable or in the public interest, the funds the foundation provides must be made available to an open group of people (i.e. no unreasonable restrictions on fund recipients and “self-help aim” is excluded). A foundation that is granted tax exemption also may not pursue any activity for commercial purposes or involve itself in any other type of business activity, nor may it place itself in a state of competition with other market participants.
Tax exemptions must be requested from the responsible tax authority. It is highly advisable for a foundation to obtain a tax-exemption ruling (confirmation of tax exemption by a tax authority) in advance, especially if it is planning to engage in impact investing activities.
In order to obtain a tax exemption, it is very important to ensure that the foundation’s charter is drafted correctly.
We can assist you with the establishment of a tax-exempt foundation, the submission of applications for tax-exempt status and a tax-exemption ruling, and all other issues that need to be addressed if you wish to obtain tax-exempt status for your foundation.