The Federal Supreme Court confirms the practice of the Solothurn tax authorities on the offsetting of hidden profit distributions at the company, also for the sole shareholder (BGE 9C_662/2023 29.04.2024).
The offsetting of a hidden profit distribution at company level does not prejudice the tax assessment at shareholder level. However, in the case of one-man companies, offsetting at company level may, according to case law, be regarded as an indication that the shareholder has received a hidden profit distribution.
In this specific case, the tax administration of the Canton of Solothurn offset a (simulated) loan from the company to its only shareholder as a hidden profit distribution. At the same time, this led to the offsetting of the loan in the shareholder’s private tax assessment, which the shareholder declared in his private tax return, including an interest deduction. This was not affected by the fact that the shareholder had previously discussed the matter verbally with the tax authorities of the Canton of Solothurn. The taxpayer’s appeal was rejected.
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