Facts
Company X AG, an operating company domiciled in the Canton of Graubünden, maintains a branch office in the Canton of Zurich. In 2007, the company sold a portion of its real estate in Zurich. The commercial profit consisted of a minor book gain and a considerable realized cyclical surplus value. In the Canton of Zurich, which has a monistic system of real estate gains taxation, no taxable real estate gain resulted due to the applicable "market value twenty years ago". In the Canton of Graubünden, which has a dualistic system, the entire appreciation gain was included in the determination of the taxable net profit. At the same time, the company reported an operating loss, which was offset against the real estate gain.Considerations
The Federal Supreme Court decided as follows:- Due to the prohibition of intercantonal double taxation and the principle of taxation according to economic performance, the real estate canton (Canton of Zurich) must credit the operating loss incurred by the enterprise in the canton of domicile (Canton of Graubünden) against the appreciation gain accruing to it. This applies regardless of whether the real estate canton has a monistic or dualistic system of real estate gains taxation. - The real estate gain remaining after the loss offset is to be…