Swiss Federal Supreme Court, 19.11.2025, 9C_54/2025
Facts
A self-employed lawyer and his wife challenged their tax assessment for the 2019 tax year. The Lucerne cantonal tax authority classified the lawyer's holdings in two companies, C. AG and D. AG, as business assets. Consequently, the CHF 1,400,000 gain realized from the sale of C. AG shares and a CHF 90,000 dividend from D. AG were taxed as income from self-employment.
The taxpayers argue that these holdings are private assets, which would make the capital gain tax-exempt. After their objections and appeals were rejected by the tax authority and subsequently by the Lucerne Cantonal Court, they have appealed to the Federal Supreme Court.
Legal Analysis
Under Swiss tax law (Art. 16 para. 1 and Art. 18 para. 1 DBG), all income derived from self-employment is taxable. This includes capital gains realized on business assets (Art. 18 para. 2 DBG). Conversely, capital gains from the disposal of private assets are tax-exempt (Art. 16 para. 3 DBG).
The distinction between business assets and private assets is based on the technical and economic function of the asset. According to established case law, a holding owned by a self-employed person is classified as a business asset if it has a sufficiently close connection to that activity. Such a connection exists, in particular, if the holding allows for significant influence over a company whose activities are similar or complementary to those of the self-employed person, with the aim of improving their own business results. The decisive criterion is the taxpayer's intent, as manifested in the facts.
The principle of protection of good faith (Art. 9 Cst.) can exceptionally bind a tax authority to a previous classification (e.g., private assets) if this practice has been maintained over a long period without any change in circumstances and if the taxpayer could legitimately rely on it.
To appeal to the Federal Supreme Court, one must have a protectable interest (Art. 89 para. 1 LTF), which is generally lacking if the appeal seeks an increase in the tax burden.
Application to the present case
The Federal Supreme Court first examines the admissibility of the appeal. Regarding cantonal and municipal taxes, the appellants' claims would result in a higher tax burden. The Federal Supreme Court therefore finds that they lack a protectable interest and declares the appeal inadmissible on this point. For direct federal tax, the appeal is also inadmissible regarding the interest in D. AG, as classifying it as business assets is more tax-advantageous for the taxpayer for the period in question. The appeal is only admissible regarding the classification of the interest in C. AG, the sale of which generated a significant capital gain.
On the merits, the Federal Supreme Court analyzes the link between the lawyer's 50% stake in C. AG (a fiduciary company) and his practice as a lawyer specializing in international tax planning. It notes that:
- The law firm and C. AG shared the same address.
- Between 2013 and 2018, the fees billed by the lawyer to C. AG represented a substantial and growing share of his total turnover (increasing from 18.4% to 44.5%).
- C. AG's fiduciary activities logically complemented the lawyer's practice, allowing him to offer comprehensive services to his clients.
These elements demonstrate a close economic link and synergy between the shareholding and the self-employed activity. The Federal Supreme Court concludes that the shareholding served the lawyer's business and must therefore be classified as business assets.
Finally, the Federal Supreme Court rejects the appellants' argument based on the protection of good faith. Although the tax authority treated the shareholding as private assets in previous years, it did so only tacitly, without conducting in-depth audits. Furthermore, the fact that the taxpayer himself raised the issue of classification with the administration in 2017 shows that he was aware of the uncertainty. He could not, therefore, rely on legitimate expectations based on previous practice.
Outcome
The Federal Supreme Court declares the appeal inadmissible regarding cantonal and municipal taxes. It dismisses the appeal regarding direct federal tax, to the extent that it is admissible. The legal costs are to be borne by the appellants.
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