No capital tax on own shares


If a stock corporation acquires its own shares, these or their value is no longer counted as taxable capital on the basis of a Federal Court ruling dated 14 November 2019 (2C_119/2018).

The Federal Supreme Court recognise no tax correction provision which would justify a deviation from the general accounting principles according to which own shares must be recorded as a negative position in the balance sheet (Art. 959a para. 2 no. 3 lit. e OR).

Whether unrealised losses in value between the market value and the acquisition costs can continue to be claimed for profit tax purposes is at least questionable. However, the Auditing Handbook permits such income recognition without restriction, as the concept of income is not defined by law (p. 244). On the basis of the general tax principle of relevance of the balance sheet, such losses in value should continue to be permitted for tax purposes if they are recognised in the income statement.

December 2019 | Author: Walter Frei

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