Facts
The [X. AG] was assessed for direct federal tax and state and municipal tax for the tax periods 2006, 2007, 2008, and 2009. The tax office of the canton of Solothurn reduced the expenses booked by [X. AG] as "external services [Y. AG] " for the tax periods 2006-2009. Similarly, the amount booked as advertising expenses for the birthday celebration of shareholder [A.] and a sale of a company car to the same shareholder at a price below market value were added back.
[X. AG] lodged an objection against these assessments, which the cantonal tax office partially approved. However, it upheld the aforementioned additions. [X. AG] requested the tax court of the canton of Solothurn to remand the assessments for the tax periods 2006 to 2009 for the purpose of conducting an assessment procedure with the right to lodge an objection; alternatively, to repeal the tax corrections.
The cantonal tax appeals court dismissed the appeal and complaint by judgment of December 7, 2015. [X. AG] requested the Federal Court to repeal the judgment of December 7, 2015, of the cantonal tax court regarding state and direct federal tax 2006 to 2009 and to remand the case to the lower court for reassessment.
Considerations
The Federal Court examined the admissibility of the appeal and found that the appellant had participated in the preceding proceedings, was particularly affected by the contested judgment, and had a legitimate interest in its repeal. The appeal is therefore admissible.
The Federal Court applied the law ex officio and examined the arguments raised. It found that the lower court had ignored and failed to evaluate legally the evidence submitted by the appellant regarding the services provided by [Y. AG] in violation of Art. 29 para. 2 Cst.
The Federal Court concluded that the lower court had wrongly made a profit-related adjustment in connection with tax consulting services provided by [Y. AG] to "customers of the appellant". The lower court…