Overview of the tax law decisions of the Swiss Federal Supreme Court published in the week from 24 to 30 April 2017.

  • Judgment of 6 April 2017 (2C_331/2017): Direct Federal Tax and State and Municipal Taxes 2014 (Fribourg); the lower instance had deduced the existence of a director's fee mainly from the fact that the income statement signed by the taxpayer had included an expense "director's fee" and had indicated the taxpayer as the recipient of the fee in the supplement to the tax return (E. 3.1 in conjunction with E. 1.1 and 1.4); insufficient appellate criticism of the complainant (E. 3.3); the circumstances of the case (in particular, the taxpayer is to date the only member of the board of directors and liquidator of the parent company) do not give rise to any objection to the assessment of evidence by the lower court (E. 3.3); dismissal of the appeal.
  • Judgement of 6 April 2017 (2C_728/2016): Cantonal Taxes 2012 (Ticino); the valuation of a majority stake in an unlisted company using the (higher) formula value according to the Praktiker method, although the purchase of a further block of shares at a lower price was made in the following year, is not arbitrary in the present case.
  • Judgment of 17 March 2017 (2C_1100/2016), official publication provided: Appeal against the judgement of the Court of Appeal of the Canton of Basel-Stadt (as Administrative Court / Tribunal of Three) of 19 March 2017 (2C_1100/2016) The complainant demanded a reduction in the IWB's bill in the amount of the pro rata costs for the operation and maintenance of the public clocks and lighting, for the concession claim and the sponsorship contribution to the Basel Theatre (Case A); insufficient explanation of how the sponsorship contribution infringes cantonal law or fundamental rights (E. 1.2.7); passing on the costs of operating and maintaining the public clocks and lighting is constitutionally permissible, as practically everyone is supplied with electricity and therefore no special group is charged (E. 2.3.4); insufficient legal basis for passing on the licence fee and the corresponding referral to the lower court (E. 3.8); partial approval of the appeal; cf. also the contribution Fabian Klaber in swissblawg.
  • Judgment of 31 March 2017 (2C_1154/2015), official publication provided: (the link to the judgement is currently inactive) Withholding tax, benefits in kind, limitation of the tax claim; the limitation period begins on the day after submission of the annual accounts to the FTA (E. 4.6.2); the limitation period is suspended for the duration of the objection procedure (Art. 11 para. 3 VStrR); the objection procedure begins with the decision of the FTA, which determines the tax claim, and not only upon submission of the taxpayer's objection (E. 5.7), approval of the FTA's appeal.
  • Judgement of 7 April 2017 (2C_241/2016): Administrative assistance (DTA Switzerland - France): On 12 September 2014, the French tax authority approached the FTA with a request for administrative assistance in order to be able to make a complete and correct assessment of A. for the tax period from 2010 to 2013. The FTA intended to comply with the request for administrative assistance in its final ruling of 23 December 2014. An appeal against this was rejected by the Federal Administrative Court on 22 February 2016. In its ruling of 7 April 2017, the Federal Supreme Court confirmed the decision of the Federal Administrative Court. The Federal Supreme Court first of all recalls the requirements for administrative assistance in the present case, namely the requirement of acting in good faith (Art. 7 letter c of the Tax Administration Assistance Act [StAhiG] and Art. 31 of the Vienna Convention on the Law of Treaties of 23 May 1969) and the criterion of probable materiality, and concludes that the requirements are fulfilled in the present case, in particular that the motive for the request for information regarding the probable materiality is sufficiently clearly formulated. The fact that the wording of the request suggests that a control procedure is still in progress does not make the request contradictory or contrary to the principle of good faith (E. 5.6).
  • Judgement of 29 March 2017 (2C_1022/2015): Administrative assistance (DTA Switzerland - France); on 23 December 2013, the French tax authority approached the FTA with a request for administrative assistance (group request) in order to be able to check the taxation of various taxpayers in accordance with a list ("listes annexées"). A., who was affected by this review, objected to the exchange of information realised through the cooperation (dismissal by interim decision of the FTA of 2 October 2014) on the one hand, and to the intended transmission of information from the FTA to the French tax authority on the other (final decision of the FTA of 10 October 2014). In an appeal of 3 November 2014, the complainant brought an action before the Federal Administrative Court and requested that the aforementioned interim decision and, in an appeal of 11 November 2014, the final decision be set aside. In its judgment of 28 October 2015 (A-6578/2014), the Federal Administrative Court upheld the interim decision of the FTA, but upheld the appeal against the final ruling. In its ruling of 15 September 2015 (A-6843/2014), the Federal Administrative Court already ruled that administrative assistance provided by another person affected by the group request was inadmissible. The FTA approached the Federal Supreme Court and demanded that its final ruling be confirmed. The question in dispute was whether the Federal Administrative Court was right to assume that the French request for administrative assistance violated the principle of good faith and therefore the request should not have been granted. The Federal Supreme Court clarifies that the lower instance had already had to assess a decision in its ruling of 15 September 2015 (A-6843/2014), in which the foreign authority requested information that was fundamentally contrary to banking secrecy (Art. 47 Banking Act) and business secrecy (Art. 162 Swiss Penal Code) and subsequently held that it (the lower instance) should not act on such requests that were contrary to the principle of good faith (Art. 7 c StAhiG). The Federal Supreme Court recalls that it did not follow this approach in its landmark decision of 16 February 2017 (2C_893/2015), which was intended for official publication (see our contribution of 16 March 2017). In the aforementioned judgement, it was stated that only actions that are actually punishable in Switzerland are also contrary to good faith within the meaning of Art. 7 lit. c StAhiG. In other words, the relevant facts must be fulfilled and the acts must be within the scope of the Swiss Criminal Code (E. 3.3). This case law also applies to the present case (E. 3.4). Subsequently, the Federal Supreme Court overturned several - apart from the data - similar rulings by the Federal Administrative Court and referred the case back to the lower court for reassessment. Cf. the subsequent Federal Supreme Court ruling of 29 March 2017 2C_2023/2015, 2C_1024/2015, 2C_1025/2015, 2C_1043/2015, 2C_1097/2015, 2C_1101/2015, 2C_1102/2015, 2C_988/2015.
  • Judgement of 20 April 2017 (2C_368/2017): Administrative assistance (DTA Switzerland - France); appeal against the judgement of the Federal Administrative Court of 21 March 2017 (A-2317/2016); cf. our contributions of 9 April 2017 and 23 April 2017; the Federal Supreme Court ruled on 5 April 2017 that the Federal Supreme Court had failed to act in accordance with the Federal Supreme Court's decision of 5 April 2017. The Federal Administrative Court subsequently informed the Federal Administrative Court that the French tax authorities had withdrawn their request for administrative assistance; the Federal Administrative Court subsequently overturned the final ruling because the FTA had not reconsidered it; the reimbursement of the costs of the proceedings from the preliminary proceedings and the compensation of the parties (see BVerfGE 101, 286 (286)) were then contentious. our contribution of 9 April 2017); the Federal Administrative Court then issued a decision on costs in a ruling of 21 March 2017; the appeal against this decision on costs was not upheld by the Federal Supreme Court in the present ruling.

Decisions are listed chronologically by publication date.

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