Effective management of a legal entity

Generally, a company has its effective management at its registered office (i.e. the one registered with the commercial register). This registered office determines the place where the company is subject to unlimited taxation.

When the place of effective management does not correspond to the registered office, the company is subject to unlimited liability in the place of its effective management.

In the Federal Court ruling 9C_591/2023 of 2 April 2024, the federal judges had to determine whether the registered office corresponded to the place of effective management.

For a thorough analysis of the concept of effective management, you can refer to my article «Effective Management and Administration» published in the Revue fiscale/Steuerrevue 2016, pp. 404 et seq.

The judgment is in German (case of double taxation between the cantons of St. Gallen and Appenzell Ausserrhoden). Publication is planned in the Federal Supreme Court Decisions.

Federal Tribunal, judgment 9C_591/2023, of 2 April 2024