Federal Supreme Court, 08.01.2026, 9C_440/2024
Facts
For the 2017 tax period, A.________ AG declared a taxable profit of CHF 412,100. During a tax audit, the Lucerne cantonal tax authority noted a lack of supporting documentation. Due to this breach of procedural obligations, the authority performed an assessment based on estimation. Specifically, it added approximately CHF 4 million back to the profit, corresponding to commission receivables that the company had fully written off (expensed) during the 2017 financial year.
Following an objection decision that slightly reduced the taxable profit, the Lucerne Cantonal Court upheld the tax adjustment, finding that the company had failed to sufficiently prove the validity of this extraordinary write-off. A.________ AG has appealed this decision to the Federal Supreme Court.
Legal Analysis
The Federal Supreme Court reiterates that a taxpayer claiming items that reduce their tax burden (such as write-offs) must prove their accuracy. The taxpayer is subject to an extensive duty to cooperate, which entails providing all documents and information necessary for the assessment.
Regarding taxable profit, the commercial balance sheet is decisive (the principle of commercial balance sheet authority), but tax law provisions take precedence. Thus, an accounting entry, even if compliant with commercial law, may be corrected for tax purposes if it is not justified by standard commercial practice.
The principle of periodicity requires that expenses and income be attributed to the financial year to which they relate. The correction of an accounting error from a previous year cannot, in principle, be made through a simple expense entry in a subsequent year. An extraordinary write-off of receivables must be justified by events occurring during the relevant year that make the recovery of those receivables unlikely.
Application to the case
The Federal Supreme Court finds that the appellant failed to provide evidence that the write-off of over CHF 4 million in commission receivables was commercially justified for the 2017 financial year. The explanations provided by the company were contradictory and unsupported by credible accounting records.
The appellant notably cited accounting errors from the previous year (2016) and a change in accounting method. The Federal Supreme Court rejects these arguments. On one hand, correcting 2016 errors via an expense in 2017 would violate the principle of periodicity, as the company did not demonstrate that the receivables became uncollectible specifically in 2017. On the other hand, the alleged change in accounting method was neither proven nor permissible under commercial law.
By failing to provide the necessary justifications and documents despite repeated requests from the authorities, the company breached its duty to cooperate. The lower court's assessment of the facts is not arbitrary. In the absence of proof regarding the validity of the write-off, the tax adjustment made by the tax authority is therefore justified.
Outcome
The Federal Supreme Court dismisses the appeal by A.________ AG and upholds the judgment of the Lucerne Cantonal Court. Legal costs are to be borne by the appellant.
Silex Tax Newsletter published in collaboration with Anna Vladau, Attorney at Law
