The case

Municipal taxes (Schwyz) and direct federal tax 2016

The tax administration assessed an intended acquisition of tangible assets as a non-value and any depreciation on the participation would, therefore, have to be taxed privately for both A-AG and D.

It was stated that, as a consequence, the signed ruling had no influence on the calculation of the fair market value, as the payments to an inactive company had been taken into account in the valuation and a reservation had been communicated in writing.

The lower court concluded that the investment in G Ltd. had already had a fair value of only CHF 112,000 at the time of the contribution and had thus represented a non-value. Accordingly, no value adjustment could be carried out in profit or loss and the fair value was determined according to the net asset value method as provided for in Circular No. 28 of the SSK for newly established companies.

The DCF method used by the appellant had been rejected by the lower court. Taking into account the Federal Supreme Court’s restraint in practice, the valuation of the shareholding in G Ltd. by the lower instance according to the net asset value method is not objectionable. The taxpayer’s appeal was dismissed.

Source: Taxlawblog and 9C_261/2023 Urteil vom 3. August 2023  

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The commentary

The information (“ruling”) of the tax administration of the Canton of Obwalden, to which the complainant refers, does not change the assessment. The tax administration of the Canton of Obwalden did not want to specify the purchase price or the contribution value in advance, and the value of the participation was, therefore, “not the main subject” of the information. In fact, the tax administration of the Canton of Obwalden had expressly refused to determine the valuation method and the capitalisation rate of 10% in advance. Therefore, despite the ruling, the complainant could not assume in good faith that the tax administration of the Canton of Obwalden would not question the purchase price of CHF 5,050,000. 

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