Taxation of intangible assets from the perspective of partnerships and SMEs

Case 1: Royalty on registered patent

1. basic facts

Dr Peter Ambühl is a qualified hand surgeon FMH with his own practice in Langenthal and also works as an attending physician at Langenthal Hospital. Even as a teenager, Peter Ambühl enjoyed tinkering in his father's mechanical workshop. Based on his many years of practical experience as a hand surgeon, he developed a medical device for gentle, invasive hand surgery operations and registered it with the Swiss Patent Office.

Dr Peter Ambühl has concluded a patent exploitation agreement with the Biel-based supplier C AG, which specialises in the manufacture of medical devices, which earns him a licence fee of 2% of the annual turnover. The annual income amounts to CHF 40,000.

Questions

1. Does the royalty income from the patent constitute taxable income?
2. How should the facts of the case be assessed from the point of view of social security?
3. How should the facts of the case be assessed from a VAT perspective?
4. How should Dr Peter Ambühl treat the expenses associated with the patent, CHF 50,000 material costs over the entire term and CHF 10,000 for the patent application, in accounting terms?

2. factual variant I

Dr. Peter Ambühl developed the medical device during his studies and registered it with the patent office. During his time as an assistant (dependent gainful employment), he is confirmed in the use/added value of his patented tool. 5 years after the patent application, he concludes an exclusive patent exploitation contract with C AG, which earns him a licence fee of 2% of the annual turnover. The annual income amounts to CHF 40,000.

Questions

1. Does the royalty income from the patent constitute taxable income, if so, under which article of the law?
2. When does self-employment start?
3. In connection with the patent, Dr. Peter Ambühl incurred material costs of CHF 50,000 and patent application costs of CHF 10,000 over the entire term of the patent. Dr. Peter Ambühl has never claimed these costs in his tax returns until now. Can he still do this "retrospectively"?
4. How should the facts of the case be assessed from the point of view of social security?

3. factual variant II

Dr Peter Ambühl never marketed the patent he applied for himself. He paid the costs of the patent application through his medical practice. Upon reaching retirement age, Dr. Peter Ambühl terminated his self-employment and at that time also sold the patent to the supplier C AG, based in Biel and specialised in the manufacture of medical devices, for a price of CHF 100,000.

Question

Are the proceeds from the sale of the patent taxable for Dr Peter Ambühl?

4. factual variant III

Dr Peter Ambühl never marketed the patent he applied for himself. The development costs were never capitalised in the accounts of his medical practice. Upon reaching retirement age, Dr. Peter Ambühl terminates his self-employment and dies 2 years later. His daughter Eva Ambühl, who works as a florist, is the sole heir and, after her father's death, concludes a patent exploitation contract with C AG, which earns her a licence fee of 2% of the annual turnover. The annual income amounts to CHF 40,000.

Question

Is Eva Ambühl's royalty income taxable?

Case 2: Copyright

1. basic facts

Hans Klick was a well-known photographer. He was married and died on 18 October 2021. Until his death he was active as a self-employed artist. He left behind a large body of work. This includes a large archive of photographs that had already been produced (developed), as well as a large number of undeveloped photographs, data carriers, illustrated books and other written documents. The sole heir is the wife Hanna Klick. Although she always supported her husband in administrative matters in his self-employment, she was never artistically active herself.

After his death, Hanna Klick continues the exploitation of her husband's works. In particular, she continues to sell the photographs and creates reproductions. She also runs an art gallery in which her husband's works are shown. She has also taken on the task of processing and cataloguing the artist's estate. However, Hanna Klick did not continue her husband's artistic work.

Questions

1. Does the heiress Hanna Klick become a self-employed person for tax purposes after the death of her husband?
2. Does the heiress Hanna Klick become a self-employed person from a social security perspective after the death of her husband?
3. Can it transfer the assets from business to private assets by expressing its will?

2. factual variant I

At the age of 80, Hans Klick ends his active self-employment and dies 2 years later. His daughter Evelyne Klick, who works as a florist, is the sole heir and, after her father's death, concludes a contract with the independent C AG, based in Biel, for the exploitation of the copyrights, which earns her compensation of 35% of the annual turnover. The annual revenue amounts to CHF 40,000.

Questions

1. Is the copyright remuneration taxable for Evelyne Klick? On the basis of which DBG/StHG articles is it taxable in this case?
2. Is copyright compensation subject to social security?

Case 3: Sale of (word) marks and domain names

1. facts of the case

Doris Müller works for a national advertising and marketing agency. In the course of her work, she has acquired in-depth knowledge of programming homepages and has already created new homepages or revised and optimised existing ones for acquaintances several times in return for payment of a friendship fee.
As a sport-affine and capable businesswoman, Doris Müller has registered the domain names www.giballes.ch and www.nitufgä.ch and has also had the two domain names entered in the national trademark register. She did this in particular with the intention of using them later for a possible self-employed activity.

A sports colleague of Doris Müller has successfully completed her training as a fitness instructor and intends to open a fitness studio. She has taken a liking to the two trademarks "giballes" and "nitufgä" and would like to use one and/or the other as the name for her fitness studio and also be able to use the corresponding domain names. She offers Doris Müller CHF 1,000 each for the acquisition of the two domain names and the possibility of having the two trademarks registered in her name in the national trademark register, thus totalling CHF 4,000.

Questions

1. How should the sale of the two domain names be qualified for tax purposes? What about the sale of the two "trademarks"?
2. Is Doris Müller considered self-employed for the purposes of social security law?
3. Will Doris Müller be liable to VAT for her activities or can she at best voluntarily register in the register of VAT payers?

Case 4: Opportunity finding

1. facts of the case

Franziska Stamm is a passionate hobby cook. Due to the gluten intolerance of one of her daughters, the preparation of gluten-free dishes is part of her everyday life, which has proven to be quite a challenge, especially when baking bread. Over the years and thanks to numerous experiments, Franziska Stamm has discovered a flour mixture and a preparation method that is in no way inferior to conventional bread in terms of consistency and taste. When she visited a gluten-free bakery that had recently opened in her town, she mentioned her "secret recipe" in conversation with the baker and shortly afterwards organised a tasting of her bread. The baker was so enthusiastic that he offered Franziska Stamm CHF 5,000 for the recipe.

Alternative: For exclusive use, the baker offers an annual payment of CHF 500.

Questions

1. How should the sales price for the prescription at Franziska Stamm be assessed for tax purposes?
2. What is the tax assessment for an annual payment of CHF 500?
3. How are the two incomes to be assessed from a social security perspective?

Case 5: Derivatively acquired intangible property rights

1. basic facts

Fredy Balsiger owns an acquired patent in his private assets. He bought it 15 years ago for CHF 1,200,000. He receives CHF 100,000 a year in licensing income from this.

Questions

1. How is the patent to be taxed in the assets?
2. What are the tax consequences if Fredy Balsiger sells the patent to a third party?
3. Can Fredy Balsiger sell the patent at market value in exchange for a loan from his F AG?

2. factual variant I

The patent expires in five years and from then on licence income can no longer be expected. Fredy Balsiger sells the patent to F AG for CHF 450,000 (present value of the discounted annual licence income for the remaining five years).

Question

What are the tax consequences?

3. factual variant II

Instead of a patent, Fredy Balsiger acquired a trademark 15 years ago at a price of CHF 1,200,000. The annual licence income amounts to CHF 100,000.

Questions

1. How is the brand to be taxed in the assets?
2. What are the tax consequences if Fredy Balsiger sells the trademark to a third party?
3. Can Fredy Balsiger sell the trademark at market value against a loan from his F AG?