Update on the taxation of corporate restructuring (2023)

Case 1: Participation deduction in case of partial sale

Facts

X. AG had held a 25 % stake in Y. AG. In December 2020, a further interest of 5 % was acquired (financial year = calendar year). Y. AG has an unchanged fair value of CHF 25 million during the whole period.

X. AG makes the following sales:

June 2021: 7% (residual interest: 23%)

October 2021: 8% (residual interest: 15%)

2022: 8 % (residual interest: 7 %)

2023: 7 %

Question

Can X. AG apply the participation deduction on the 2021-2023 sales? 

Variant 1

The sales are staggered as follows:

2021: 15 % (residual interest: 15 %)

2022: 10 % (residual interest: 5 %)

2023: 5 %

variant 2

The sales are staggered as follows:

2021: 15 % (residual interest: 15 %)

2022: 10 % (residual interest: 5 %)

2023: 3 % (residual interest: 2 %)

2024: 2 %

Variant 3

X. AG has a stake of 25 % and makes the following sales:

2021: 8 % (residual interest: 17 %)

2022: 8 % (residual interest: 9 %)

2023: 9 %

Case 2: Waiver of receivables recognized directly in equity

Facts

X. AG has a claim of CHF 10 million against its subsidiary Y. AG. In 2023, it waives its claim (à fonds perdu). Under commercial law, this is recognized in equity at Y. AG without affecting profit or loss (variant: affecting profit or loss).

Questions

• How should the waiver of receivables at Y. AG be treated for profit tax purposes?
• Would there be more efficient tax structuring options?

Case 3: Indirect total liquidation

Facts

Mr. X. sells the (operational) X. AG (AK/KER: CHF 100,000) on 15.11.2022 (variant: 15.5.2022) to Y. AG for CHF 10 million. In the balance sheet as at 31.12.2021 (approved by the General Meeting on 15.6.2022), Y. AG has non-operating distributable funds under commercial law of CHF 800,000. (In the balance sheet as at 31.12.2020, Y. AG has non-operating distributable funds under commercial law of CHF 500,000).

On March 5, 2023, X. AG will be absorbed by Y. AG (absorption merger).

The balance sheet of X. AG as of 31.12.2020 is as follows (in TCHF):

The balance sheet of X. AG as of December 31, 2021 is as follows (in TCHF):

Questions

• What are the tax consequences of the absorption merger for Mr. X?
• Variant 1: How would the case be assessed if X. were to contribute X. AG into the newly founded Z. AG (share capital: CHF 100,000) at a value of CHF 100,000 and on 5.3.2023 both Z. AG and X. AG would be absorbed by Y. AG would be absorbed?
• Variant 2: How would variant 1 be assessed if on 5.3.2023 only Z. AG and X. AG would only be absorbed by Y. AG would be absorbed?

Case 4: Real estate asset swap

Facts

Pension Fund A., a BVG investment foundation, transfers properties in the Canton of Berne to an investment foundation. For this purpose, Pension Fund A. received non-par value and irrevocable claims (book claims) to the extent of the market value of the transferred properties in an investment group of the Berna Investment Foundation. In addition, other pension funds are entitled to the investment group of the Berna Investment Foundation in question.

Questions

• Does the transfer trigger real estate gains tax?
• Does the transfer trigger property transfer tax and land registry fee?