The Federal Supreme Court annuls an appealed decision of the Administrative Court of the Canton of Berne and states that the competence to tax the deferred tax substrate is vested in the canton of move-in even in the case of reinvestment-related changes of ownership, i.e. the sale of the replacement property within a short period of time (uniform method).
In April 2008, the taxpayer sold its previously owner-occupied property in the Canton of Berne. As it claimed a replacement purchase, the real estate gain was not taxed. The replacement property was a property in the canton of Geneva, which the taxpayer resold in June 2010 without acquiring another replacement property. The tax administration of the Canton of Berne then assessed the originally deferred real estate gains.
In its ruling of 28 September 2017 (2C_70/2017), which is scheduled for publication, the Federal Supreme Court dealt with the question of whether the Canton of Berne, as the canton of departure, will remain responsible for taxing the property gains realised on its territory despite the tax deferral at the time (decomposition method) or whether the entire property gain realised through the sale of the replacement property will be taxable in the Canton of Geneva (uniform method).
In accordance with BGE 143 II 233 and contrary to the recommendation proposed by the Swiss Tax Conference (SSK) in this regard, the Federal Supreme Court followed the complainant's view that the uniform method should also be applied in the case of a resale of the alternative property outside the canton within the first five years of its acquisition. Consequently, the canton of Geneva, as the canton of immigration, was allowed to tax the entire profit from the sale of the replacement property.
For a detailed discussion of the decision, see the article by Franziska Bur Bürgin on ludwigpartner.blog of 24 October 2017.
