Overview of the tax law decisions of the Swiss Federal Supreme Court published in the week from 21 to 27 January 2019.

  • Judgment of 21 December 2018 (2C_619/2018): Administrative assistance DTA (Switzerland - India); the Indian Ministry of Finance (MoF) submitted a request for administrative assistance to the FTA regarding C in relation to taxes on assets and income. It stated that it had evidence that the person concerned was actively involved in the establishment of offshore business companies in Switzerland and that he was the beneficial owner of several bank accounts held by different companies. These companies also included A Ltd. and B Ltd. (appellants). Two central legal questions had to be clarified in the specific proceedings: Firstly, under which conditions a person with signatory powers, who neither belongs to the family of the person concerned nor is a lawyer or notary, should be blacked out on the basis of Art. 4 para. 3 StAhiG. Secondly, whether a request for assistance from India based on illegally obtained data ('Falciani data') is admissible. With regard to the second question, the Federal Supreme Court considered that the mere use of illegally acquired data by the requesting state, which the requesting state had received in the context of (spontaneous) administrative assistance from another state, did not constitute disloyal behaviour, contrary to the view of the complainants and various authors. This would require additional actions, such as a contractual assurance not to use data acquired illegally by other states. However, India would not have any such obligation under the relevant DTA (E. 2.3.5). With regard to the first question, it should be noted that the transmission of information on non-data subjects is inadmissible under Art. 4 para. 3 StAhiG, unless the information is likely to be substantial and its transmission is proportionate in the sense that the suppression of this information would render the request for administrative assistance worthless (E. 3.1). The identities of the persons in question in the present case constitute an essential element in the verification of cash flows, in particular since those persons are authorised to sign for several companies at the same time. The likely relevance is therefore given (E. 3.5). The Federal Supreme Court rejected the complainants' comments on the lack of data protection in India on the grounds that there was no indication that the requesting state would not comply with its contractual obligations and that therefore nothing would prevent the granting of administrative assistance (E. 4.3). Dismisses the appellants' appeal
  • Judgment of 8 January 2019 (2C_1113/2018): Direct Federal Tax and State and Municipal Taxes 2014 (St. Gallen); the contested offset in the amount of CHF 37,800, which relates to an alleged expense in connection with consulting services from abroad, is not objectionable, as the taxpayer is not able to present the questions raised by the lower court as manifestly incorrect. In the case of an assertion of payments abroad, the possibilities of investigation of the assessment authority are naturally limited. Accordingly, taxpayers are subject to a particularly qualified duty of cooperation in the case of payments abroad. They must not only name the recipient of the payment, but also explain all the circumstances that led to the payment, in particular the contracts, bank documents and correspondence (E. 2.2.3). The taxpayer's appeal is dismissed.
  • Judgment of 8 January 2019 (2C_1123/2018): State and municipal taxes 2016 (Thurgau); valuation of a property for the purposes of property tax and income tax (imputed rental value); the valuation order has become final and unchallenged; the appeal is unfounded and is dismissed
  • Judgment of 9 January 2019 (2C_936/2018): Withholding tax (Ticino); due to insufficient declaration, the complaining taxpayers (spouses) were subsequently refused a refund of the withholding tax in the amending decision of 23 January 2017. Contrary to the opinion of the complainants, the claim of the cantonal tax authorities is not time-barred, since the recipient of the contested withholding tax payment was requested to repay the tax within six months of the opening of the provisional reduction (22 November 2016) in accordance with Art. 58 (1) VStG. Moreover, the complainants' arguments against the existing evidence proved to be untenable. The appeal is dismissed in so far as it is admissible.
  • Judgment of 9 January 2019 (2C_973/2018): Direct Federal Tax and State and Municipal Taxes 2015 (St. Gallen); after the complainant taxpayer, who runs a bar, reported a remarkably low gross profit margin of 56.25% in the 2015 tax period and did not comply with the request to submit the cash strips, the cantonal tax office moved to a discretionary supplement with a calculated gross profit margin of 72%. The taxpayers' argument that they had no reason to keep such daily accounts proves to be unfounded, especially since, according to the Federal Court's case-law, the keeping of a cash account is indispensable, especially for small businesses. Only in the case of a daily cash fall was the conformity of the recorded cash receipts with the actual circumstances guaranteed (E. 2.2). The taxpayers' complaint is unfounded and is dismissed.
  • Judgment of 10 January 2019 (2C_1147/2018): Direct Federal Tax and State and Municipal Taxes 2016 (Freiburg); the complaint proves to be manifestly unfounded, as the taxpayers do not pay either the calculated net income or the self-paid medical costs in a way that would make the considerations in the first instance appear untenable or contrary to federal law. The taxpayers' complaint is dismissed.
  • Judgment of 10 January 2019 (2C_16/2019): Direct federal tax and state and municipal taxes 2014 (Solothurn); according to federal court rulings, the statements of an addressee regarding the existence of an incorrect postal delivery are to be taken into account if they are comprehensible and correspond to a certain degree of probability, whereby his good faith is presumed (BGE 142 III 599 E. 2.4.1 p. 604). In support of his position, the taxpayer refers to the reliability of Swiss Post in his home environment, which he considers to be insufficient. This is not sufficient to overturn the natural presumption of the proper delivery of the collection invitation. The taxpayer's complaint is dismissed.
  • Judgment of 14 January 2019 (2C_977/2018): Appeal; autonomy of the municipality in tax matters (Valais). The municipality of Leytron/VS does not have municipal autonomy with regard to the determination of the tax domicile (tax liability), with regard to the post-tax and penalty tax procedure, but these competencies are the responsibility of the cantonal tax office. Dismissal of the appeal of the municipality.

Non-occurrence decisions / inadmissible complaints:

Decisions are listed chronologically by publication date.

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