Facts
The [X. AG] had been in composition liquidation since April 1993 and formed a provision of 26 million Swiss francs in 1993 for guarantees, letters of comfort, and performance guarantees. This provision was only used to a modest extent in the following years. For the 2000 tax period, the [X. AG] was assessed according to self-assessment for a taxable profit of 0 Swiss francs and a taxable capital of 0 Swiss francs (zero assessment). In 2002, the [X. AG] dissolved the provision in question with an effect on earnings and reported an annual profit of 3.26 million Swiss francs. In the 2002 tax return, the [X. AG] applied to dissolve the provision of 4.37 million Swiss francs and to offset it against the existing loss carryforward. However, the tax authorities did not recognize this subsequent "self-offsetting" because the assessment for 2000 had already become legally binding.Considerations
The Federal Court confirmed the decision of the tax authorities. It stated that the [X. AG] had not dissolved the provision in question with an effect on earnings in the annual financial statements relevant for 2000 and had also not made any offsetting for provisions not justified for business reasons in the 2000 tax return. It was not until the 2002 annual financial statements that the dissolution of the provision with an effect on earnings took place, which was no longer permissible after the assessment…