The practitioner’s method and wealth tax: Judex calculat!

Just when you think that everything has been said and written about the Praktiker method, interesting judgments on interesting cases appear again. In the case decided by the Zurich Tax Appeals Court on August 27, 2024 (1 ST.2024.53), negative company performance led to higher wealth tax. The judgment is final.

The case

The initial situation was as follows: A non-operating holding company holds only one shareholding, which it acquired in 2016 for around CHF 6.3 million. This was initially included in the taxable value of the holding company at acquisition cost, as this purchase price is initially considered to be the market value in accordance with KS 28 (Rz. 2 para. 5).

However, this only applies as long as the company’s economic situation does not change significantly. According to the commentary on KS 28, a significant change is defined as, among other things, “a 20% change in sales.”

Read the full blog post here.