From the magazine SZW-RSDA 2/2020 | S. 138-150 The following page is 138

Pièges fiscaux du contrat de prêt

Intérêts négatifs, résiliation anticipée et remise de dette

This contribution deals with the tax « traps » of the loan agreement. Loans are usually quite simple from a tax standpoint since they are neutral. Yet, the author examines three specific instances where things do not turn out so well. The first of which is the cancellation of ­indebtedness, which may result in taxable income ­(Article 16 par. 1 or Article 18 par. 1 Direct Federal Tax Law). The author acknowledges that the cancellation of indebtedness (remise de dette; Aufhebung durch Über­einkunft) causes a net accretion of wealth. On the other hand, he shows that the tax burden may become too heavy to carry when the taxpayer is in financial dis­tress. Thus, when required by the circumstances, the judge should be able to rely on his power to decide in fairness (Article 4 Civil Code) to depart from the purely fiscal (and open-ended) concept of income. Secondly, this contribution deals with the early termination of the contract. With respect to mortgage credits for example, the…