Art. 78 Tax Act (StG) - General Provisions

1. The taxable net profit comprises

a. the balance of the income statement, taking into account the carry-forward from the previous year;

b. all parts of the business result excluded before calculating the balance of the income statement, which are not used to cover business-related expenses, including in particular

1. costs for the acquisition, production, or enhancement of fixed assets;

2. non-business-related write-offs and provisions;

3. allocations to reserves;

4. contributions to equity from the legal entity's own funds, insofar as they do not originate from reserves taxed as profit;

5. open and hidden profit distributions and non-business-related contributions to third parties;

c. income not credited to the income statement, including capital gains, liquidation gains, and revaluation gains, subject to Article 84 of this law. For the purposes of undisclosed reserves, the relocation of the registered office, the management, a business operation, or a permanent establishment outside Switzerland is equivalent to a liquidation if such formation reduced the profit in Switzerland;

d. interest on hidden equity.

2. The taxable net profit of legal entities that do not prepare an income statement is determined analogously to paragraph 1.

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