Close
An analysis by Tax Partner AG, Taxand Switzerland
The Zurich Administrative Court has recently upheld a decision confirming that Switzerland cannot tax capital gains from the sale of a majority stake in a real estate company without a “land-rich company clause” in the applicable double taxation treaty.
The case in question involved a German resident selling a majority share in a Swiss real estate company. The double taxation agreement between Switzerland and Germany does not contain such a clause, so the court determined that the right to tax the capital gains in the absence of this clause falls to the country of residence of the seller, Germany in this instance.
This ruling supports the established Swiss tax practice and helps prevent double taxation, impacting international real estate structures. The decision has been appealed to the Federal Supreme Court for final legal clarity.
Marco Vitali and Maxim Dolder from our Swiss member firm Tax Partner AG have summarised the most important points of the ruling which can be read here.
For similar content to our Global Guide, subscribe to our mailing list and keep up to date.