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income tax, would have violated X AG's protectionto legitimate expectations under the rulingconcluded with the Zug tax administration.IV. Final CommentsBased on the above described decision of the FederalSupreme Court it is clear that a foreign PE ofa Swiss company with a lean infrastructure whichis in clear contrast to the figures shown in the P&Lstatements of the Swiss company, lacks the necessarysubstance in order to qualify as a PE underSwiss domestic tax law. In the absence of a doubletaxation treaty between Switzerland and the foreignjurisdiction, the entire net income of the Swisscompany is subject to Swiss taxation.Additionally, one should note that in order toavoid a retroactive denial of a ruling concludedwith a cantonal tax administration with respectto federal corporate income tax it appears to beimportant that the FTA is involved in the rulingnegotiation process. From the above outlinedruling of the Federal Supreme Court it seems thatthe involvement of the FTA in the ruling processwith the cantonal tax administration will grantthe taxpayer the protection of legitimate expectationsunder the ruling negotiated with the cantonaltax administration.E NDNOTE1BGE 2C_708/2011.8