Taxation of the Vaud Cantonal Bank

Facts

The Vaud Cantonal Bank (BCV) is a public limited company under public law within the meaning of Art. 763 para. 2 CO. Until 31 December 1995, the Canton of Vaud held 52.3% of its share capital. For the 1995 fiscal year, the Cantonal Tax Administration of the Canton of Vaud subjected it to the federal direct tax on the entirety of its taxable profit (CHF 84,524,300) and capital (CHF 1,722,412,000). The BCV contested this taxation before the Administrative Court of the Canton of Vaud, which dismissed its appeal.

Considerations

According to the Federal Supreme Court, the assessment and collection of the federal direct tax are carried out by the cantons, under the supervision of the Federal Department of Finance. The Federal Council has no competence to decide whether a legal entity can benefit from an exemption under Art. 56 DFTA. The BCV cannot be exempted either under Art. 56 let. b DFTA, as it is not a cantonal public law institution, nor under Art. 56 let. g DFTA, as its activities are primarily oriented towards profit-seeking, even…