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641.4 STG CH-OW

Art. 21 Tax Act (StG) - Restructurings

**Taxation of Natural Persons - Income Tax - Taxable Income - Self-Employment**
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Art. 21 StG - Restructurings · Restructurings

1. Hidden Reserves of a Sole Proprietorship or Partnership are not taxed during restructuring, particularly in the case of mergers, demergers, or conversions, as long as the tax obligation continues in Switzerland and the values previously determining the income tax are adopted

a. during the transfer of assets to another sole proprietorship or partnership;

b. during the transfer of a business or a part of a business to a legal entity;

c. during the exchange of participation or membership rights in the course of restructuring pursuant to Art. 81 para. 1 of this law or merger-like consolidations.

2. In a restructuring under paragraph 1 letter b, the transferred hidden reserves are retrospectively taxed according to the procedure outlined in Arts. 230 to 232 of this law, insofar as participation or membership rights are sold at a price exceeding the transferred taxable equity within five years following the restructuring; in such a case, the legal entity can assert corresponding hidden reserves taxed as profit.

3. Paragraphs 1 and 2 shall apply mutatis mutandis to enterprises operated under joint ownership.

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Court Decisions Applying This Provision (4)

VVGE.1981.82.Nr.57 · ow (Art. 21 Abs. 1 in Verbindung mit Art. 23 Bst. c StG)
Capital Gains Tax on Business Assets Conversion
This provision is cited as the legal basis for taxing capital gains on all kinds of assets for those required to keep books.
VVGE.1978.80.Nr.41 · ow (Art. 21 Abs. 1 StG)
Taxable Income for Room and Board Provided to Employee
This provision states that all income from gainful employment in cash or in kind, which accrues to the employee in connection with the employment relationship and has its basis therein, is subject to income tax. The court used this to establish that the value of board and lodging was taxable income.
VVGE.1978.80.Nr.43 · ow (Art. 21 Abs. 1 StG)
Employer's Apartment Valuation Taxable Income
This provision establishes that all income from employment, whether in cash or in kind, is subject to income tax.
VVGE.1981.82.Nr.58 · ow (Art. 21 Abs. 1 in Verbindung mit Art. 23 Bst. c StG)
Mixed-Use Property Capital Gain Taxed as Business Income
Used to establish that capital gains of bookkeeping-obligated individuals from the sale of assets are subject to income tax.