Tax
M&A transactions: Hidden profit distribution. A simulated loan issue at the level of a Swiss target company could trigger adverse Swiss tax consequences for the buyer.
A taxpayer had a debt to a Swiss limited liability company/GmbH held by him, for which the cantonal tax authorities had refrained from claiming a personal taxable income under certain conditions communicated in writing and accepted by the taxpayer. The taxpayer/borrower subsequently breached these conditions with the result that the cantonal tax authorities qualified the loan receivable as a simulated loan.