Decisions of the Swiss Federal Supreme Court (calendar week 37)

Overview of the tax law decisions of the Swiss Federal Supreme Court published in the week of 11 - 17 September 2017.

Judgment of 24 August 2017 (2C_1051/2016): Conscription rate (Zug); according to unanimous doctrine and practice, the conscription rate does not belong to taxes but to substitute taxes (causal taxes); the explicit and deliberate limitation of the duty of military service and civil defence according to Art. 59 para. 1 and 2 of the Federal Constitution and Art. 61 para. 3 of the Federal Constitution constitutes an exception to the prohibition of discrimination and equality of rights according to Art. 8 para. 2 and 3 of the Federal Constitution (lex specialis); no violation of Art. 14 in connection with Article 4.2 and 4.3 of the ECHR; in the judgment of the European Court of Human Rights cited by the complainant, the official duty existed only on paper, which is not the case with regard to Swiss military service; thus, the substitute for military service does not have the character of a pure levy detached from the actual duty; dismissal of the complaint

Judgment of 1 September 2017 (2C_1176/2016; 2C_1177/2016): Direct federal tax and cantonal and communal taxes 2009 (Valais); bankruptcy of a public limited company; payment of CHF 100,000 by the co-shareholder (20%) and Board member A.X. on the basis of a joint and several guarantee; inadmissibility of the deduction of CHF 100,000 from the income tax of A.X. and his wife as "other costs necessary for the exercise of the profession" (Art. 26 para. 1 lit. c DBG). no reference to BGer 2C_465/2011 of 10 February 2012 is possible, in which such a deduction was recognised as admissible because the payment was made in connection with an impending causal liability as a director; in the present case, however, the guarantee was received in connection with the subscription of new shares, which means that it has no connection with the activity as a director; no sufficient causal connection between the guarantee and the employment of A.X. in this company.

Judgment of 24 August 2017 (2C_774/2015; 2C_775/2015): Cantonal tax and direct federal tax (Ticino); the taxation of an imputed rental value by someone who, by tacit agreement with the tenant of a property, can use that same property free of charge is contrary to federal law.

Judgment of 4 September 2017 (2C_519/2016): Visitor's tax (holiday flats); partial approval of a complaint against the visitor's tax regulations of the municipality of Leukerbad of 17 December 2015. Right of the affected owners to be heard prior to the adoption of the regulations (legal hearing) not violated in the present case; qualification of the visitor's tax as a cost assessment tax (no causal tax); inappropriate reference to the average frequency of the rented objects for the determination of the flat rate; assumption of an average occupancy rate of 60 overnight stays for holiday objects not proven (currently 46 as statistically proven); unconstitutionality of the municipal regulations, insofar as they assume an average occupancy rate of 60 days.

Judgment of 29 August 2017 (2D_28/2017): Direct federal tax 2012-2014 (Aargau); tax remission; the complaint will not be taken up

Judgment of 30 August 2017 (2C_714/2017): State and municipal taxes 2015 (Thurgau); separate annual tax on capital payments 2016; the appeal is not upheld.

Judgment of 1 September 2017 (2C_609/2017): State and municipal taxes 2013 (Thurgau); restoration of time limits; the appeal will not be considered.