Value fluctuation reserves may not be deducted for tax purposes

A public limited company wanted to deduct value fluctuation reserves from its tax bill. It created these reserves by “neutralizing” capital gains on shares at the end of the year, i.e., placing them in a reserve. However, the Federal Supreme Court ruled that this type of reserve may not be deducted for tax purposes.

Reasons:

• There is no political will to allow such reserves for tax purposes.
• The general rules for provisions were not complied with.
• Only risks that have actually materialized may be taken into account for tax purposes, not merely possible future price losses.

However, the court also states:

• Cantons may make their own rules and allow flat-rate value fluctuation reserves, for example for certain

In the end, the court rejected A AG’s appeal, meaning that it was not able to deduct the value fluctuation reserve from its taxes. (Source: BGE 9C_625/2023 of February 19, 2025)