28 February 2022

Profit allocation in the light of Art. 25b THL

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With the entry into force of the Federal Law on Tax Reform and AHV Financing (STAF) on 1.1.2020, new tax incentive instruments for specific business functions have been introduced within the framework of ordinary taxation.

On 15 January 2020, the Swiss Tax Conference (SSK) published KS SSK 34/2020, which uses numerical examples to show how profit allocation should be implemented in the intercantonal relationship when STAF relief is claimed.

This article deals with the profit allocation in the light of Art. 25b StHG. The question is to be answered whether, due to the introduction of the STAF, new "specific" principles of profit allocation must be applied if STAF relief is claimed in the intercantonal relationship, as proposed in KS SSK 34/2020. After a critical appraisal of KS SSK 34/2020 and on the basis of practical examples, which lead to a new solution proposal, the author comes to the conclusion that the distribution of the STAF relief between operating and non-operating profits is already regulated within the framework of the cantonal profit determination. This also means that the principles of intercantonal tax law (IKStR) developed by the Federal Supreme Court prior to the introduction of STAF can continue to be applied in the context of intercantonal profit when STAF relief is claimed.

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