Facts
Spouses A.A. and B.A. live in C. with their four children. A.A. (hereinafter: Taxpayer 1), a trained graphic designer, is a comic book author, an activity he pursues on a self-employed basis. Between 2010 and 2012, A.A. received payments from third parties, recorded as "miscellaneous donations" in the balance sheet of his self-employed business activity, for a total amount of CHF 90,753.33 in 2010, CHF 70,895.37 in 2011 and CHF 84,828.66 in 2012. These amounts were not mentioned in the tax returns for 2010 to 2012.
The Tax Administration of the Canton of Bern has taxed the A. spouses for the federal direct tax (FDT) and the cantonal and municipal tax (CMT) for the fiscal periods 2010, 2011 and 2012, considering that the "miscellaneous donations" were taxable. The taxpayers have contested this decision.
Considerations
The Federal Tribunal examined whether the amounts received by Taxpayer 1 constituted tax-exempt donations under Art. 24(a) DFTA or tax-exempt subsidies under Art. 24(d) DFTA.
According to case law, donations are exempt from direct income tax, in order to avoid double taxation with the gift tax. Subsidies from public or private funds are also exempt, with the aim of ensuring that aid to disadvantaged or needy…