Facts
Company A. SA, established in 1976, acquired the entire share capital of three companies C. AG, D. AG and E. SA in 2005, 2006 and 2009 respectively. In its tax returns for 2011 and 2012, the company declared amortizations and provisions on these participations. The Cantonal Tax Administration made adjustments by recapturing these amortizations and provisions in the taxable profit, pursuant to Art. 62 para. 4 DFTA.
The company contested these decisions, but the Federal Supreme Court dismissed its appeal, both in terms of direct federal tax and cantonal and municipal taxes.
Considerations
According to the Federal Supreme Court, Art. 62 para. 4 DFTA allows the recapture of amortizations and value adjustments on qualified participations (holding of at least 10% of the capital or profits and reserves) that are not or no longer justified by commercial usage. This provision applies both to amortizations and value adjustments that have never been justified and to those that are no longer justified.
The Federal Supreme Court rejected the company's arguments, notably that the fact that the tax administration had accepted the amortizations in previous years does not prevent it from challenging them subsequently, in accordance with the principle of the independence of tax periods. The…