The case
The sole heir of a sole shareholder sold the company. In order to settle two debts, she assigned the purchase price claim to the sold company shortly afterwards. In the same year, the acquiring company sold its new subsidiary. The last significant asset was offset against the purchase price claim. In the present case, all conditions of the indirect partial liquidation are fulfilled and can be applied to the full liquidation (absorption merger). For the calculation, the funds under commercial law and not the funds under tax law are decisive. The heiress has actively participated in the liquidation. She acquired the AG’s art collection after its sale and she assigned the purchase price claim to the AG. The appellant’s appeal was dismissed.
Source: taxlawblog and Federal Supreme Court, Judgement of 2 March 2022 (2C_135/2021) (German)
The commentary
According to Art. 20a para. 1 lit. a DBG, a partial liquidation exists if the following four conditions are met: 1) a participation of at least 20 % held by one or more persons as private assets, or participations totalling at least 20 % held by several persons acting jointly as private assets, 2) the contribution of the participation(s) to the business assets of the acquirer(s), 3) a distribution in the five years following the sale of non-operating assets that existed at the time of the sale and were distributable under commercial law, and 4) the participation of the seller(s) (cf. Judgements 2C_702/2018 of 28 March 2019 E. 4, in: StR 74/2019 p. 551; 2C_703/2018 of 28 March 2019 E. 4, in: RDAF 2019 II p. 285; ruling 2C_906/2010 of 31 May 2012 E. 2.2, in: RDAF 2012 II p. 342). Source: Recitals 3.3. (2C_135/2021).
This publication has been prepared solely for information purposes and is does not constitute a recommendation, a solicitation, or an offer. The information on which this publication is based has been obtained from sources that we believe to be reliable and in good faith, but we have not independently verified such information and no representation or warranty, express or implied, is made as to its accuracy. All expressions of opinion are made as of the date of publication and may be subject to change without notice. k-flash accepts no liability or responsibility whatsoever for any consequential loss of any kind arising out of the use of this publication or any part of its contents. The use of this publication should not be regarded as a substitute for the exercise by the recipient of his or her own judgment. This publication is not directed to any person in any jurisdictions that prohibit such publication.
