54 11. SUMMARY AND CONCLUSIONS From among the western European countries examined, only some countries offer conditions for private foundations which are as favourable in terms of taxation as those existing in Aus- tria. These countries are Switzerland (only some cantons – particularly the canton Schwyz) and Liechtenstein. Neither country belongs to the European Union. Some member countries of the EU such as Cyprus, Ireland and some Eastern European member countries generally offer low corporate tax rates with the result that current taxation similar to that for Austrian private foundations can be achieved there. However, in order to understand the functioning of private foundations, it is essential to look at foundation taxation from two different perspectives and to consider to what extent pay- ments to the foundation and out of private assets are subject to taxation, (e.g. through inheri- tance and gift tax) and to what extent distributions of foundations to private persons are sub- ject to taxation. In Austria, the tax rate for payments to a foundation is only 2.5%, while distribution of founda- tion profits is subject to final taxation of 25% (deducted the interim tax of 12.5 paid at the level of the foundation). From among the western European countries examined, something similar can only be found, as already mentioned, in Switzerland and Liechtenstein. All other countries only allow such advantages for public utility foundations. Of course, one can realise even better tax results in tax havens such as Panama, for exam- ple. However, donors who transfer significant assets to such places must also take into ac- count other circumstances, such as the stability of the political system, the stability and safety of the financial sector, the reliability of the legal system, and how easy the assets may be accessed to, etc. Thus, many tax havens are excluded as locations despite the minimal tax burden. Also in European territories, there are tax havens and countries with low corporate tax rates (tax-exemption of non-realised profits) and countries that do not levy any inheritance and gift tax (e.g. Estonia). However, with regard to these countries, potential donors should also weigh the above-mentioned stability criteria. If stability criteria and tax advantages are con- sidered as two factors that cannot be looked at separately, then there is no doubt that Aus- tria, along with Switzerland and Liechtenstein, is at the top of the most attractive locations for foundations that do not pursue a public utility purpose. In combination with impermeable bank secrecy, this naturally results in frustration on the part of neighbouring countries, which are forced to watch capital outflow to Austria. It is obvious that the Austrian regulations for foundation are not exactly in the spirit of the European Union; but even from a mercantilist perspective, it is questionable whether the Austrian “beggar my neighbour” policy really brings about the many economic advantages that could justify such regulations.