Decision on the Taxation of a Waiver of Claim

Facts

The appellants A and B [Z.] were assessed for the 2003 tax year with a taxable income of CHF 2,552,800 (cantonal and municipal taxes) and CHF 2,556,800 (federal direct tax), respectively. The deviation from the self-declaration was due in particular to the fact that a waiver of claim by [D. AG] against A. [Z.] in the amount of CHF 2,010,000 had initially been included in the income tax assessment. Upon objection, the taxable income was reduced to CHF 982,800 (cantonal and municipal taxes) and CHF 986,800 (federal direct tax), as the tax authorities considered the waiver of claim to be valuable only to the extent of CHF 440,000 and thus as taxable income. The appellants challenged these assessments before the Federal Court.

Considerations

The Federal Court held that the waiver of a claim by a bank against a private client is generally to be treated as a taxable net asset increase within the meaning of Art. 16 para. 1 DFTA. A capital gain within the meaning of Art. 16 para. 3 DFTA is not present here, as this is not a sale of private assets. The waiver of the claim is also not a compensation payment, but a remission of a…