Cash withdrawal from pension fund: Self-employment does not necessarily have to be lucrative

The tax office of the canton of Solothurn appealed to the Federal Supreme Court because it disagreed with a cantonal court decision. It was of the opinion that the lump-sum withdrawal from a taxpayer’s pension fund was not legal because, according to the tax office, the taxpayer was not truly self-employed. The tax office complained that the taxpayer spent too little time on his self-employment and did not generate enough profit.

The Federal Supreme Court ruled that it was irrelevant how much of the freed-up capacity the taxpayer spent on his newly taken up self-employment. He is free to decide how intensively he wishes to pursue this activity and how he wishes to organise it.

There is also no legal obligation to invest the freed-up provident fund in the business assets or to have a minimum duration of the self-employed activity.

In this context, the Federal Supreme Court mentions that the tax authorities are not bound by the assessment of the pension fund when assessing whether a self-employed activity exists or has been taken up. The taxpayer was right by the Federal Supreme Court. (Source: BGE 2C_217/2021 of 4.11.21)