Overview of the tax law decisions of the Swiss Federal Supreme Court published in the week 16 - 22 September 2019.
- Judgment of 21 August 2019 (2C_891/2017): Real estate gains tax (Zurich); the cantons have a certain amount of leeway as to which costs can be credited as expenses for real estate gains and whether and to what extent they credit brokerage commissions as expenses. In accordance with long-standing Zurich practice, a brokerage commission of 2% of the purchase price is credited as "normal" for the entire cantonal territory, up to 3% for properties that are difficult to sell and less than 2% for high sales proceeds. With § 221 para. 1 lit. c StG ZH there is a formal-legal regulation which allows the crediting of the "usual brokerage commission". Although the term "customary" and common practice suggest that the tax authorities should be guided by the market, they may apply a certain degree of schematisation and flat-rate taxation. Dismissal of the appellants' appeal.
- Judgment of 22 August 2019 (2C_848/2018): Real property gains tax (Schwyz); in the present case, the costs were structured and shared between the parties involved in such a way that part of the land price was shifted to the remuneration for work and the profit from the land of the complainant as a property seller was to a considerable extent re-declared as expenditure vis-à-vis the general contractor and thus transferred to the sister company. This was not in accordance with the principle of effective cost allocation and did not correspond to a so-called third-party standard design of the expenses incurred, as would have been the case if the expenses had been compared with those of a third-party. Accordingly, the Court of First Instance also made a profit calculation for the purposes of levying the real estate profit tax, which is in no way consistent with the appellant's own calculations. This legal assessment does not turn out to be arbitrary insofar as it remains within the (relative) free space of cantonal law; it is also in line with the requirements of harmonization law as they result from Art. 12 para. 1 StHG. Dismissal of the appellant's appeal.
- Judgment of 5 August 2019 (2C_805/2018): Administrative assistance DTA (CH-FR); the information according to which the respondents are taxed in Switzerland on the basis of expenses is to be qualified as presumably substantial within the meaning of Art. 28 para. 1 DTA CH-FR and consequently to be transmitted to the Direction Générale des Finances Publiques (DGFP) (cf. on this also BGE 145 II 112 as well as our article of 28 February 2019). Approval of the appeal of the FTA.
- Judgment of 22. August 2019 (2C_854/2018): Guest taxes (Grisons); Law on guest and tourism taxes (Tourism Law [TG/Laax]); the complainants take the view that the guest tax levied by the municipality of Laax is unconstitutional the revenue from the guest tax is used by the municipality not only for the benefit of the tourist infrastructure, but also to cover the general financial budget and the flat-rate method used to calculate the guest tax leads to arbitrary results; a cost allocation tax is constitutionally permissible if it serves exclusively the aforementioned purpose of cost allocation and is not used to finance general municipal tasks (earmarking) whether this criterion is fulfilled must be assessed on the basis of the actual use of the tax revenue; in the present case, no improper use could be proven; the assessment of the guest tax on the basis of the planned flat-rate does not lead to a result which would be in blatant contradiction with the underlying factual circumstances either; the assessment of the guest tax in the case of the complainants violates the prohibition of arbitrariness (Art. 9 BV) not (E. 5.5); the appeal is dismissed in so far as it is upheld.
- Judgment of 19 August 2019 (2C_265/2018): VAT; tax exemptions (2008 to 2013); it is not proven that the taxpayer has, in the context of the lump-sum compensation, carried out activities which are exempt from tax as educational transactions; due to the distribution of the burden of proof, the taxpayer bears the disadvantage of lack of evidence and it can be assumed that he has not carried out any services which are exempt from tax; a discretionary tax assessment is therefore not necessary; upholding of the FTA's appeal
- Judgment of 20 August 2019 (2C_195/2019): Withholding tax (Zurich); appeal expressly concerns only the reimbursement of withholding tax, on which the contested decision contains no comments; no final decision has been reached, so that the appeal is to be treated as an appeal against denial of justice; since the lower instance signalled its willingness to reach a challengeable decision in the consultation procedure, there is no final denial of justice; dismissal of the taxpayers' appeal.
- Judgment of 22 August 2019 (2C_177/2018): Import duties; obligation to provide subsequent performance (import of horses); the lower court found the facts of the case incomplete and thus violated its duty to examine and the right to be heard, since the change of the intended use under the applicable old law did not trigger a new duty to declare, which is why the question whether the two horses (E. and F.) should be used at the riding tournament is legally relevant; further violation of the duty to examine and the right to be heard regarding horse D., as the offered evidence remained unappreciated; by initially importing the horses H. and I. under the temporary admission procedure and not paying any import duties, the prerequisite of the obligation to render subsequent performance according to VStrR is fulfilled; partial approval and rejection to the lower court.
- Judgment of 22 August 2019 (2C_559/2019): Direct Federal Tax 2009 (Aargau); the taxpayers already lost before the Federal Court (see judgment 2C_940/2017 of 28 March 2018 or our contribution of 22 April 2018). It was decided that the profits from the sale of real estate were subject to income tax with regard to cantonal and communal taxes; the assessment for direct federal tax was to be carried out in accordance with the new jurisdiction; there is no evidence that the tax authorities would have delayed the assessment in bad faith; dismissal of the taxpayers' complaint.
- Judgment of 29 August 2019 (2C_896/2018): Direct federal, cantonal and communal taxes 2006 - 2015 (Geneva); qualification of loans from a company to its main shareholder as simulated or as a payment in kind. The granting of a loan to a shareholder in financial difficulty, without security, without a repayment schedule and if the loan also amounts to 70% of the company's assets, the tax authorities may qualify as a simulated loan without being able to accuse them of arbitrariness (E 5.4.2).
Decisions are listed chronologically by publication date.
