Source: http://www.swisstaxnetwork.ch/individual-taxation---besteuerung-nat-personen/tax-consequences-of-a-share-deal
Timestamp: 2019-04-19 10:32:19+00:00

Document:
- For real estate companies and for foreign sellers, check if due to the economic conveyance there is a possible neutral revaluation of real estate value in the tax on the real estate earnings balance on the basis of a double tax treaty.
- Stamp income duty: Shell trades (Art. 5 Abs. 2 lit. b STA)?
1 Indirect partial liquidation: The indirect partial liquidation arises out of Art. 20a para. 1 lit. a FITA/Art. 7a para. 1 lit. a CCITHA and includes the proceeds from the sale of participation of at least 20% of the nominal capital of a corporation representing a transfer from private to business assets of another individual or legal person. Required is that "within five years following the sale, the acquirer causes the target to distribute reserves that are not necessary to the business of the target and that were distributable within the meaning of commercial law at the time of sale; the same principle applies if within five years, several parties who own such participation sell together participation totaling at least 20%; if these conditions are met, the seller is taxed on the amount of distribution (a posteriori taxation) on the basis of recapture procedure pursuant to Art. 151 para. 1, 152 und 153 FITA.
3 Transposition: According to Art. 20a para 1 lit. b FITA/Art. 7a para. 1 lit. b CCITHA, transposition includes the proceeds from the transfer of participation of at least 5% of nominal or authorised capital of a corporation or a cooperative from private to business assets of a partnership or of a legal entity. After the transaction, the seller controls the acquiring company holding at least 50% of the capital, to the extent that the shares are contributed at a price exceeding their nominal value. This principle applies by analogy when several parties transfer their participation together.
5 Shell trades: Transfer of the majority of the equity securities to an economically liquidated company, which has suspended its business activities. From a tax perspective, the shell trade is treated as a liquidation with subsequent new establishment.
6 Real estate company: Real estate companies mainly use real estate (rental, lease, transfer). If the majority of the shares is sold in such companies, there is an economic change of ownership. Such transactions usually involve the cantonal tax on capital gains and in some cantons the property exchange tax.
7 Participation relief for dividends: If the receiving company holds at least 10% of the nominal or authorised capital of the distributing company or receives at least 10% of the profits and reserves of the distributing company, or holds share of a monetary value of at least CHF 1 million, the corporate income tax is reduced by reference to the ratio existing between participation income and total net profit (Art. 69 f. FITA; Art. 28 para. 1 and para. 1bis CCITHA).
Participation relief for capital gains: Capital gains qualifies for participation relief when the sold shares sold equals at least 10% of the nominal or authorised capital of the other company, or provide rights to at least 10% of the earnings and reseves of the other company, and if the corporation or cooperative that undertook the sale held the shares for at least one year (Art. 69 in conjunction with Art. 70 para. 4 FITA; Art. 28 para. 1 and Abs. 1bis CCITHA).
8 Payment in kind: Anything like payment, credits, offsetting or what otherwise benefits the shareholder from the company, which are not repayment of capital contribution (Art. 4 WHTA; Art. 20 WHT Ordinance).
- Offsetting of losses subject to the condition of continuing the business operation of the indirectly purchased business in Y.-AG is in principle possible, since the losses remain preserved by the purchase of Y. AG.
- The group acquires the rights of participation of Mr. X. during a share deal. It is thus not possible to offset income of the company in the Y. AG with the interests on debt payable on the group level, as well as in another company.
- No additional deduction potential, as the asset value in the Y. AG remains unchanged with the share deal.
1 Mr. X. can minimize the risk of such indirect partial liquidation, by requiring the group in writing in the purchase agreement to refrain from doing any harmful substance distributions within five years following the sale (for instance dividends from existing sale, distribution of reserves that are not necessary to the business and that are distributable within the meaning of commercial law at the time of sale).
2 Therefore, in the purchase Agreement the group must ensure that the risk, which are inter alia discovered in the course of the tax due diligence, are covered in the future by Mr. X. despite the sale.

References: Art. 20
 Art. 151
 Art. 20
 Art. 28
 Art. 70
 Art. 28
 Art. 20