Facts
A.A. and B.A., a couple of taxpayers, transferred in 2011 plots of their agricultural estate from business assets to private assets, and then donated them to their three daughters. They requested to benefit from the deferred taxation provided for in Articles 18a of the Federal Act on Direct Federal Taxation (LIFD) and 21a of the Vaud Cantonal Direct Tax Act (LI/VD).
The Cantonal Tax Administration rejected this request, considering that the donation did not constitute an "alienation" within the meaning of these provisions, thus terminating the deferred taxation. The taxpayers appealed against this decision up to the Federal Tribunal.
Considerations
The Federal Tribunal dismissed the appeal, considering that the concept of "alienation" provided for in Article 18a LIFD and Article 8 para. 2bis of the Federal Act on the Harmonization of Direct Taxes of Cantons and Municipalities (LHID) encompasses the donation.
Indeed, a literal, systematic and teleological interpretation of these provisions leads to this conclusion. The donation constitutes a form of alienation under civil law and the purpose of the Corporate Tax Reform II was to alleviate taxation upon the…