Taxation of a property belonging to the business assets of a self-employed person

Facts

A. is domiciled in the canton of Geneva where he operates as a property manager in a real estate agency run as a sole proprietorship. In his 2001 tax return, he reported a rental property belonging to his business assets, which he declared to the tax authorities at its book value. However, the Cantonal Tax Administration of the canton of Geneva assessed this property in the taxpayer's wealth at an amount exceeding its book value. A. appealed against this decision, arguing that the disputed property should be taxed at its book value. The Cantonal Appeals Commission and the Administrative Court dismissed his appeal, finding that the property should be valued at its capitalized rental income value according to a rate determined by the State Council.

Considerations

The Federal Tribunal dismissed A.'s appeal. It considered that, according to the Federal Act on the Harmonization of Direct Taxes, properties belonging to the business assets of a self-employed person must be taxed at their market value or yield value, and not at their book value. The Genevan cantonal law, which provides for the valuation of these properties based on the capitalization of the annual rental income, is in line with this federal requirement.

The Federal Tribunal also rejected the appellant's argument that this cantonal regulation would violate the principle…