Overview of the tax law decisions of the Swiss Federal Administrative Court published in the week from 17 to 23 April 2017.

  • Judgement of 5 April 2017 (A-360/2017): Administrative assistance (DTA Switzerland - Spain); refusal by a bank to grant access to the files in administrative assistance proceedings; the complainant is not affected in her own interests; no damage to her reputation to be classified as significant; the appeal is dismissed.
  • Judgment of 11 April 2017 (A-5769/2016): VAT; emission reduction certificates (2011); qualification of turnover from the spot sale of climate protection certificates under the Kyoto Protocol (CERs; Certified Emission Reductions), turnover from the spot sale of voluntary climate protection certificates (VERs; Verified Emission Reductions) and turnover from the forward or option sale of voluntary climate protection certificates (VERs) as exempt from tax within the meaning of Art. 21 para. 2 no. 19 let. e MWSTG (Value Added Tax Act). The Federal Administrative Court concludes that the CERs and VERs do not qualify as uncertificated securities within the meaning of Art. 21 para. 2 no. 19 let. e VAT Act (E. 6.3.4). For VAT purposes, sales of such emission reduction certificates can only be considered as the transfer of intangible assets that is not exempt from tax (E. 6.3.4). On the other hand, the qualification of sales of forwards or options in connection with CERs and VERs as tax-exempted benefits under Art. 21 para. 2 no. 19 let. e VAT Act, is not objectionable, as both forwards and options are classic derivative financial instruments whose value is derived from that of the respective underlying product (E. 8). The complaint is partially upheld and it is stated that sales from forward and option contracts relating to CERs and VERs, but not sales from spot sales of these emission reduction certificates, are to be subsumed under Art. 21 para. 2 no. 19 let. e VAT Act.
  • Judgment of 6 April 2017 (A-882/2016): Tobacco tax; water pipe tobacco; the amendment of Article 2(6) of the Tobacco Tax Ordinance (TStV) of 29 April 2015 (entered into force on 1 May 2015), i.e. the qualification of water pipe tobacco as fine-cut tobacco, was questionable. The Federal Administrative Court concludes that, apart from the fact that water pipe tobacco contains cut tobacco (which only qualifies it as manufactured tobacco) and that its consumption is hazardous to health (which generally applies to all tobacco brands), water pipe tobacco has nothing in common with fine-cut tobacco due to its completely different nature and type of use, and therefore cannot be subsumed under the product category fine-cut tobacco. By equating water pipe tobacco and fine-cut tobacco in the new provision of Art. 2 para. 6 TStV introduced on 1 May 2015, the Federal Council is clearly disregarding the framework set by the product categories in Art. 10 of the Tobacco Tax Act (TStG). In the opinion of the Federal Administrative Court, by enacting Art. 2 para. 6 TStV, the Federal Council has exceeded its discretion to define tobacco products more precisely and has violated the principle of legality under tax law, which is why Art. 2 para. 6 TStV (in the present application act) proves to be unlawful and unconstitutional (E. 4.4). The assessment of tobacco tax and related charges (SOTA fee and prevention fund) must be based on the regulation applicable to water pipe tobacco until 30 April 2015 (Art. 11 para. 1 in conjunction with Annex IV TStG = 12% of the retail price) (E. 5.1).

Decisions are listed chronologically by publication date.

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