Decisions of the Swiss Federal Supreme Court (CW 1-2 - 2022)

Overview of the tax law decisions of the Swiss Federal Supreme Court published between 1 - 9 January 2022.

Ruling of 8 December 2021 (2C_82/2021): Zurich state and municipal taxes
and direct federal tax, tax exemption as of the 2017 tax period (see our article of 31 January 2021); In this case, the Canton of Zurich denied the men's gymnastics club the partial tax exemption for the youth league (school-age children, no club members). The Federal Supreme Court considers the prerequisite for the partial tax exemption of the youth club to be fulfilled due to the pursuit of public purposes. The complainant's appeal is upheld and the Canton of Zurich must grant the partial tax exemption from 2017.
Judgment of 9 December 2021 (2C_1033/2020): Guest tax; The inclusion of rooms such as the kitchen, corridor and living room in addition to the bedrooms as "net living space" for the calculation of the guest tax proves not to be arbitrary. Furthermore, the annual flat rate actually charged is plausible and therefore also not arbitrary. Moreover, contrary to the taxpayer's complaint, there is no violation of the prohibition of intercantonal double taxation for the sole reason that the guest tax is moderate or insignificant. Dismissal of the taxpayer's appeal.
Ruling of 29 November 2021 (2C_127/2021): State and municipal taxes and direct federal tax 2009-2012 (Zurich); In the case at hand, both incorrect entries (intra-group distribution of turnover by means of an adjustment entry at the end of the year) and private expenses of the partner that were not justified on business grounds were correctly offset against the profit. Dismissal of the taxpayer's appeal.
Ruling of 7 December 2021 (2C_719/2021): State and municipal taxes 2012 (Aargau); the subject of the present proceedings is the question of whether the tax authority was correct in recognising the taxpayer's investment income as income after a monetary benefit had been offset at the level of the company held by him alone (the taxpayer was also the sole director). It is true that in such a case there is no automatic offsetting mechanism. However, the established hidden profit distribution at the level of the company causes a permissible presumption, which the taxpayer must dispute in detail. The taxpayer did not succeed in doing so. Dismissal of the taxpayer's appeal.
Judgment of 21 December 2021 (2C_991/2021): State and municipal taxes 2007-2015 (Grisons); Revision; The taxpayer was the owner of a property that he rented out from 1995. The tenant only partially paid the rent from 2003 onwards. In 2005, the taxpayer had taken legal action against the tenant for the first time, but then refrained from taking further steps due to assurances, etc. The taxpayer had accordingly taken legal action against the tenant in 2005. Accordingly, the taxpayer had declared the rent in full in the tax returns for the tax periods in dispute, 2007-2015. The corresponding assessment rulings became final and unchallenged. At the end of May 2018, the taxpayer initiated debt enforcement proceedings against the tenant and received a writ of attachment as a certificate of loss at the end of October 2019. In mid-November 2019, the taxpayer requested that the assessment orders for the tax periods 2007-2015 be revised to the effect that the uncollected rent be removed from the assessment. The assessment authority did not accept the request for revision. At issue before the Federal Supreme Court was whether the taxpayer was able to comply with the 90-day deadline pursuant to Art. 51 para. 2 of the Tax Act (StHG) and the similarly worded Art. 142 para. 1 of the Tax Act (StG GR) with his revision request of November 2019. The Federal Supreme Court upheld the lower court's finding that the taxpayer, exercising reasonable diligence, should have realised during the disputed assessment proceedings that it was not (or no longer) expected to receive payment. Accordingly, he had not been able to meet the 90-day deadline with his request for revision of November 2019. Dismissal of the taxpayer's appeal.
Judgment of 23 December 2021 (2C_815/2021): direct federal tax 2011-2012, 2016-2019 and state and municipal taxes 2011-2012 (Zurich); safeguarding; the lower court was right to assume that the tax was at risk, as the taxpayer did not submit a tax return for almost 10 years and thus grossly neglected her duties to cooperate. In the case of direct federal tax, there is no overcollateralisation, and in the case of state and municipal tax, it cannot be assumed that the lower court made an arbitrary assessment of the evidence. Dismissal of the taxpayer's appeal.

Non-occurrence: