Swiss Tax – The One Pager

Facts of the case

In its decision of 23 December 2025 (9C_369/2025), the Federal Supreme Court dealt with a supplementary tax assessment procedure relating to the 2010 tax period. The dispute centered on whether the patents that the taxpayer had acquired from a company in 2009 and transferred to another newly founded company in 2010 should be classified as business or private assets.

The Solothurn cantonal tax administration assumed that the taxpayer had been self-employed between April 2009 and June 2010. It classified the patents as business assets and calculated hidden reserves of around CHF 3.9 million when they were transferred to the company. The Tax Court of the Canton of Solothurn confirmed the tax administration's position and the imposition of additional tax, whereupon the taxpayer lodged an appeal with the Federal Supreme Court.

Legal basis

According to Art. 18 of the Federal Direct Tax Act (DBG), income from self-employment and capital gains on business assets are taxable. The assessment procedure is subject to the principle of ex-officio investigation (Art. 123 para. 1 DBG), supplemented by the taxpayer's obligation to cooperate (Art. 124 ff. DBG). In terms of burden of proof, the tax authorities must prove facts that increase the tax liability, while the taxpayer must prove facts that reduce the tax liability. Assets may only be classified as business assets if they are used entirely or predominantly for self-employment that is actually carried out.

Considerations of the Federal Supreme Court

The Federal Supreme Court holds that merely holding patents does not constitute self-employment. Rather, the decisive factor is whether the taxpayer has taken concrete, verifiable steps to exploit the patents during the relevant period, for example by concluding licence agreements, independent market appearance, development or distribution activities, or the use of borrowed capital.

In the present case, the lower court essentially relied on already known circumstances and abstract assumptions. Despite its duty to investigate, it did not establish any new facts or actions that would prove actual exploitation between 2009 and 2010.

In the absence of evidence of actual self-employment, the Federal Supreme Court denied the classification of the patents as business assets. The patents were therefore reallocated to the taxpayer's private assets and the additional tax assessments revoked in full.

Key Takeaways

• No ‘automatic’ classification of intangible assets as business assets: patents are not considered as business assets simply because they are potentially exploitable or can be contributed to a company. Verifiable exploitation activities aimed at generating profit are required.
• Clear burden of proof on the tax authorities: if a tax-increasing classification as business asset cannot be substantiated, this operates to the detriment of the tax authority – including in additional tax proceedings.