Overview of the tax law decisions of the Swiss Federal Supreme Court published in the week from 25 November to 1 December 2019.

  • Judgment of 5 November 2019 (2C_285/2018): State and municipal taxes 2013 (Thurgau); surplus of production costs of a real estate company according to KS 27 SSK. While Kt AG allocates losses proportionately to the other cantons, Kt TG first allocates them to the main tax domicile (HSD). A mix of methods should be avoided as far as possible. Losses must therefore be offset first and foremost against the profit on the HSD. Only if the total loss is higher than the profit on the HSD is the excess proportion to be allocated proportionately to the profits of the other cantons. The complaint against the Canton of Thurgau is dismissed. The matter is referred back to the tax office of the Canton of Aargau for a new assessment in the sense of the considerations.
  • Judgment of 6 November 2019 (2C_484/2019): Direct federal tax, cantonal and municipal taxes 2004-2010 (Vaud); the lower court rightly qualified the recognition of vehicle expenses attributable to the private life expenses of the individual shareholder or persons closely associated with him as a payment in kind. The schematic allocation of costs between private and business expenses is also unobjectionable in view of the company's incorrect accounting. On one point concerning the 2006 tax period, however, a reformatio in pejus was carried out without prior consultation of taxpayers. This is a hearing impairment and cannot be justified on the basis of the periodicity principle by the fact that an improvement has been achieved over all disputed tax periods. Partial approval of the taxpayers' complaint.
  • Judgment of 11 November 2019 (2C_383/2019): Direct federal, cantonal and communal taxes 2009 (Jura); the taxpayers had submitted their tax returns after the deadline set in the reminder had expired, after which the tax administration offered the prospect of a discretionary assessment which took place more than two years later. According to the wording, Art. 130 para. 2 DBG provides for two alternative reasons why a discretionary assessment may be provided for (breach of duty after reminder or unclear facts). However, a discretionary assessment must only be carried out if, despite an investigation carried out by the tax authority, it has not been possible to shed sufficient light on the facts of the case and an uncertainty therefore remains which prevents the tax administration from carrying out the assessment completely and correctly. In other words, the fact that the taxpayer has breached his procedural obligations does not confer the right to a discretionary assessment if the tax administration has been able to establish ex officio all the elements relevant to the taxation. Dismissal of the tax administration's complaint.
  • Judgment of 11 November 2019 (2C_633/2019): Cantonal tax (Ticino and Lucerne); intercantonal double taxation; place of effective administration of a company. In the present case, the complainant is a company with its registered office in the canton of Lucerne, which manages shareholdings and real estate throughout Switzerland. The sole member of the Board of Directors or Managing Director of the Company is resident in the Canton of Ticino. Both the tax administration of the Canton of Ticino and that of the Canton of Lucerne have asserted the existence of an unlimited tax liability of the company concerned within its own tax sovereignty. The complainant then challenged the existence of an unlimited tax liability in the Canton of Ticino up to the Federal Supreme Court. The BGer dismissed the taxpayers' complaint on the grounds that the place of actual administration was in Ticino. In the canton of Lucerne, on the other hand, the company had only a formal registered office, since it did not obviously use any of the premises nor hire or employ staff. The statutory seat is not adapted to the actual situation and thus appears artificial. Rejection of the taxpayer's complaint.
  • Judgments of 12 November 2019 (2C_526/2019, 2C_531/2019, 2C_532/2019, 2C_533/2019); State and municipal taxes of the Canton of Vaud and direct federal taxes 2004-2011; post-tax and criminal proceedings against the company and the sole shareholder for unrecorded sales. A merger of post-tax and criminal tax proceedings against the company and the sole shareholder is not justified. No infringement or manifestly incorrect finding of the facts. No statute of limitations on tax evasion. The Federal Supreme Court recalls that tax evasion fines should have been reviewed by the lower court and should not simply have been confirmed. Nevertheless confirmation since not challenged in federal court.
  • Judgment of 1 October 2019 (2C_411/2019): Sewerage connection fee (Canton of Solothurn); the complainant was not granted a right by previous agreements to free collection of waste water to be treated for newly constructed buildings, so that the imposition of a sewerage connection fee is neither contrary to the principle of trust nor constitutes an interference with acquired rights. Moreover, the connection fee does not appear to be so high that the principle of equivalence would justify intervention in the regulatory fee schedule. Dismissal of the complainant's complaint.
  • Judgment of 6 November 2019 (2F_25/2019): Time limit recovery; late submission of legal documents to the Federal Supreme Court as evidence; appeal manifestly not sufficiently substantiated; forwarding orders to the Swiss Post (in the form of retention of postal items) are not able to extend the ordinary postal collection period of seven days. A late complaint can only be lodged if the taxpayer proves that he or his representative was prevented from filing the complaint on time through no fault of his or her own (material condition) and the appeal was lodged within 30 days of the removal of the obstacles (formal condition). The proof of a sufficiently serious illness must be documented with a meaningful medical certificate. The request for restitutio in integrum is rejected. The request for appeal is rejected if it is to be acted upon.
  • Judgment of 11 November 2019 (2C_257/2018, 2C_308/2018): Direct federal tax and state and municipal taxes 2001-2007 (Schwyz); completed tax evasion; the offence of completed tax evasion is fulfilled by anyone who, as a taxpayer, intentionally or negligently causes an assessment to be unjustly omitted or a legally binding assessment to be incomplete. (Contingent) intentional tax evasion occurs when a company recognises unjustified payments (abroad) as an expense and does not recognise revenue (sale of vehicles), as this behaviour directly results in non-taxation or undertaxation. In this case, the shareholder evaded taxes with effect for the company (tax reduction). Income of the shareholder from commissions for the brokerage of mortgages may not be included in the assessment of the tax fines in this case. The taxpayers' complaint is partially approved. The judgment of the Administrative Court of the Canton of Schwyz is set aside and the case is dismissed for a new determination of the tax fines. The complaints of the administration and the tax administration of Canton Schwyz are rejected.
  • Judgment of 11 November 2019 (2C_1067/2017): Direct Federal Tax and State and Municipal Taxes 2001-2007 (Schwyz); after-tax proceedings concerning the above decisions 2C_257/2018, 2C_308/2018 (criminal tax proceedings). It is not objectionable under federal law that the interest on arrears on the after-tax was taken into account in the tax period of the after-tax assessment (Solothurn model) instead of in the period of origin affected by the after-tax (Geneva model). The limitation period for tax assessment (2002 and 2003 tax periods) has to be taken into account by the Office as a substantive issue; on this point the appeal is approved. In addition, brokerage commissions of around CHF 24,000 were wrongly set off, as there could be no competing activity of the sole shareholder from self-employment from the outset; the complaint is therefore to be approved. Moreover, the appeal is unfounded and dismissed.
  • Judgment of 11 November 2019 (2C_32/2018, 2C_35/2018): Direct federal tax and state and municipal taxes 2001 - 2004 (Schwyz); after-tax and completed tax evasion. The right to determine after-tax expires 15 years after the end of the tax period to which it relates. Criminal proceedings for complete tax evasion expire ten years after the end of the tax period for which the taxable person was not assessed or was assessed incompletely. The procedure of the cantonal authorities in terms of evidence does not entail the nullity of the contested decision. The taxpayer's complaint is partially approved. The judgement of the Administrative Court of the Canton of Schwyz is set aside in respect of the after-tax provisions for the 2002 and 2003 tax periods. In addition, the complaints of the administration and the tax administration of Canton Schwyz are rejected.
  • Judgment of 30 October 2019 (2C_551/2019): Direct federal tax and cantonal and communal taxes 2004-2007 (Berne); after-taxes; the lower court rightly did not recognise the rental expenses paid by a company held by the taxpayer to its sister company as justified on business grounds and accordingly accepted a payment in money's worth to the taxpayer in application of the triangular theory; rejection of the taxpayer's complaint.
  • Judgment of 18 November 2019 (2C_872/2019): Direct federal tax and cantonal and communal taxes 2008 (Canton of Ticino); tax waiver; violation of the right to be heard and of the tax authority's duty to state reasons; complaint in public matters; subsidiary constitutional complaint. The complainant was refused the tax remission for the year 2018. Consequently, it alleges infringement of the right to be heard and of the duty of the tax authorities to state reasons up to the Federal Supreme Court. Since the consequences of the refusal of tax remission, i.e. the payment of taxes, do not constitute a legal issue of fundamental importance within the meaning of Art. 87 lit. m BGG, the BGer comes to the conclusion that the appeal is not admissible in public matters. It was also questionable whether the complainant's complaint was subject to a subsidiary constitutional complaint. The BGer rejected the subsidiary constitutional complaint on the grounds that it could not apply the law officially because the requirements of Art. 106 (2) BGG were not fulfilled: The complainant had not raised and substantiated in its complaint a sufficient complaint concerning the infringement of fundamental rights and of cantonal and intercantonal law; rejection of the taxpayers' complaint.

Non-occurrence decisions / inadmissible complaints:

Decisions are listed chronologically by publication date.

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