Dismissal of the appeal by company Y. SA against the taxation of federal direct tax and cantonal and municipal taxes for the year 2004

Facts

Y. SA is a joint-stock company registered in the commercial register of the canton of Neuchâtel since 1955. Its purpose is the operation and management of real estate. In 2006, the Cantonal Tax Authority notified Y. SA of the assessments for the 2004 fiscal year, both for the cantonal and municipal taxes and for the federal direct tax. The taxable profit was set at 21,800 francs, after a reversal of 11,150 francs from the amount of 21,150 francs declared by Y. SA as salary and other expenses paid to A., the sole director and shareholder of the company.

The tax assessments were confirmed by the Neuchâtel Tax Tribunal and the Neuchâtel Administrative Tribunal. Y. SA then appealed to the FSCA.

Considerations

The FSCA dismissed the appeal to the extent that it was admissible. It considered that when the cantonal court of last instance renders a single decision that applies to the federal direct tax and the cantonal and municipal taxes, and the legal issue is resolved in the same way under federal law and harmonized cantonal law, the appellant can challenge this decision in a single appeal. It is no longer necessary to require the filing of two separate appeals, as was previously the case.

In the present case, the contested decision did not distinguish, in its operative part, the federal direct tax from the cantonal and municipal taxes. However, the reasoning indicated that the notion of net profit, which serves as the basis for the taxation of legal entities and is part of the harmonized…