Facts
RUAG Schweiz AG (formerly RUAG Aerospace AG), a joint-stock company, is involved in a legal dispute with the Tax Office of the Canton of Lucerne regarding the taxation of federal, cantonal and municipal direct taxes for the year 2005. The dispute revolves around the question of whether a provision for social plan costs in the amount of approx. CHF ________ as of December 31, 2005 was still commercially justified or whether this provision should be dissolved as hidden reserves and attributed to the taxable profit.
The provision for social plan costs was originally established as part of the conversion of the former federal armaments company into a private limited company on January 1, 1999. At that time, the provision was commercially justified, as a significant reduction in personnel was to be expected. In the following years, however, the provision was only partially utilized, as the workforce remained relatively constant until 2004. In 2005, there was then a decline in the number of employees, which was more than compensated for in the following year.
The Federal Court concludes that the commercial necessity of the provision had to be examined at the latest in 2005. Since the appellant was unable to present any facts that would justify a need for a provision as of 2005, the Federal Court considered the amount of approx. CHF ________ to no longer be commercially justified. This amount must therefore be attributed to the taxable profit.
Considerations
The Federal Court states that provisions which are no longer commercially justified must be attributed to the taxable profit. This corresponds to the principle of periodicity, according to which the profit of a…