Overzealous Zurich tax office: one-off sale of real estate is assessed as self-employment

The Zurich tax office suffered a defeat before the Federal Supreme Court. It interpreted the profit from the sale of a married couple’s property not as a private capital gain, but as proceeds from commercial property trading, for which it was not proven right.
The Federal Supreme Court ruled in favour of the spouses, as they had only managed their private assets. Private assets are managed even if the assets are extensive, professionally managed and commercial books are kept. This even applies where the owner builds over his property in order to make a profit from renting it out. The court argued that independent gainful activity cannot be assumed if the investments made do not have a commercial character. In this case, it was merely a case of taking advantage of an opportunity that presented itself and not of profit-seeking and planned conduct. (Source: BGE 2C_702/2020 of 21.4.2022)