Start-up valuation before the federal court

Founding a company with just one customer is courageous – valuing it at CHF 5 million is sporty. A dispute with the tax authorities over this ended up before the Federal Supreme Court. In its decision of 03.08.2023 (9C_261/2023), the court ruled on the valuation of a newly founded company.

The facts of the case

Very briefly, a shareholder contributed his newly founded Dienstleistungs-AG to another of his companies in return for a loan. The only customer of the service company was again the group of companies. The shares were valued at CHF 5 million using a DCF method and the loan was then offset against a receivable from the contributing shareholder.

A short time later, the shares were devalued and transferred back to the private level of the investor. The devaluation of the investment in the following year was justified by subsequent negative developments, including a crisis at the financing bank and the onset of the Ukraine conflict.

Read the full blog post here.