Case 1: Determination of turnover threshold for M&A transactions

1. facts of the case

1.1 Option 1: Takeover

The Müller Group, consisting of Müller Holding AG, headquartered in Switzerland and various subsidiaries in Switzerland and abroad, intends to take over the Meier Group. The target group consists of Meier Holding AG, headquartered in Switzerland, and various subsidiaries in Switzerland and abroad. From a legal point of view, Müller Holding AG will act as the buyer, offering one newly created Müller Holding AG share and CHF 20 in cash for each share of Meier Holding AG.

The revenues of the two groups are as follows (each converted into EUR), with the Müller Group using IFRS as the accounting standard and the Meier Group using Swiss GAAPFER.

1.2 Option 2: Increase in participation rate

Analogous facts as variant 1. The Müller Group already holds a stake of around 40% in the Meier Group (or its parent company Meier Holding AG). There is already a lively mutual business activity between the Müller Group and the Meier Group. Of the Müller Group's consolidated revenues, around EUR 200 million comes from transactions with the Meier Group. The Müller Group intends to increase its shareholding from 40% to 60%.

1.3 Variant 3: Spin-off

In recent years, the Müller Group has achieved consolidated sales of the equivalent of around EUR 1,000 billion. As part of a strategic realignment, it intends to completely spin off part of the business and float it on the stock exchange as the Meier Group. The Meier Group will have an expected consolidated turnover of around EUR 200 million in the first year.

Question

How is the turnover of EUR 750 million relevant for the determination of subjective tax liability determined in the respective variants?

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Case 2: Joint and several liability

1. facts of the case

The US-based Pharma Group Inc., headquartered in Boston / USA, has three subsidiaries in Switzerland as well as a permanent establishment of a French subsidiary. As part of a restructuring of the European business, the following transactions are planned:

• Transaction 1: Sale of the subsidiary Pharma III (Switzerland) AG to a Basel-based pharmaceutical group as part of a share deal;
• Transaction 2: Sale of the business activities of the branch to the Swiss subsidiary of a French pharmaceutical group as part of an asset deal;

All of the companies involved are subject to minimum tax on the basis of their global turnover, and the subsidiaries and the permanent establishment of Pharma Group Inc. in Switzerland form a VAT group.

Questions

• How are these transactions to be assessed on the basis of Art. 6 MindStV (joint liability)?
• How are these transactions to be assessed on the basis of Art. 1 5 para. 1 lit. c VAT Act (joint liability)?

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Case 3: Joint Venture

1. facts of the case

Year 1

A hedge fund from the United Arab Emirates (UAE), which is not yet subject to the global minimum tax due to a lack of EUR 750 million in turnover and prepares its consolidated financial statements in accordance with IFRS, and a Chinese private individual want to develop a drug against a rare disease. To this end, they set up a joint venture in year 1 in the form of a stock corporation based in Baar / Canton of Zug, with each investor holding 50% of the capital and 50% of the votes (variant: Chinese private individual holds 50.1% of the capital and 50% of the votes).

Year 3

In its third year, the hedge fund based in the United Arab Emirates is making a major acquisition, which means that it is now subject to the global minimum tax due to the additional turnover.

Year 6

The joint venture is a success and from the sixth year onwards, the company generates recurring revenues of around EUR 1,000 million from the marketing of the drug. In its seventh year, the joint venture will establish a subsidiary in Shanghai, China, and Boston, USA, to distribute the drugs.

Question

How do you assess this situation from the point of view of the Swiss supplementary tax?

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Case 4: Accounting Standard for Asset Deals

1. facts of the case

The Swiss subsidiary (pre-tax rate: 20%) of a Dutch food group is taking over the dog food business from a Swiss competitor as part of an asset deal. Part of the acquired assets is the "Leckerli" brand, the purchase price of which is set at CHF 1 billion in the contract. According to a ruling, the buyer can depreciate the trademark for tax purposes over 10 years. The Dutch group prepares its annual financial statements in accordance with IFRS.

Questions

• How do you assess this situation on the basis of the GloBE model regulations?
• How could this problem be solved on the basis of the Minimum Taxation Ordinance (MindStV)?

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Case 5: Push-Down Accounting for Share Deal

1. facts of the case

A pharmaceutical company that is subject to the global minimum tax and prepares its consolidated financial statements in accordance with IFRS acquires a Swiss stock corporation with IFRS equity of CHF 100 million at a price of CHF 600 million as part of a share deal. The surcharge of CHF 500 million is to be allocated to the Company's patents and CHF 100 million to goodwill in accordance with the Purchase Price Allocation ("PPA") in the amount of CHF 400 million. The transaction took place on December 15, 2021.

Question

How do you assess this share deal from the point of view of the Swiss supplementary tax?

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Case 6: Capital gain in share deal

1. facts of the case

The South Korean Sumsang Group has grown strongly in the past due to many M&A transactions and therefore has a very complex group structure. Among other things, it holds a 15% stake in the Italian Forca S.p.a., which it intends to sell with a high capital gain. 8% of the shares are held by the Swiss-based Sumsang (Switzerland) AG and another 7% by the German Sumsang (Germany) AG.

Questions

• How do you assess the sale of the 8% shares by Sumsang (Switzerland) AG from the point of view of the Swiss supplementary tax?
• Does the assessment change if the Group held only 20% of Sumsang (Germany) AG?
• Is there any change in the assessment if the 8% shares are voting shares and the 7% shares are ordinary shares?