Decisions of the Swiss Federal Court (CW 11 - 2020 )

Overview of the tax law decisions of the Swiss Federal Supreme Court published in the week of 9 - 15 March 2020.

Judgement of 21 February 2020 (2C_726/2019): State and municipal taxes 2015 (Aargau); disputed and to be reviewed was the direct tax permissibility of regular depreciation on investment properties. The assessment authority was of the opinion that depreciation on investment properties was not permitted. In this context, the Federal Supreme Court held that the properties in dispute were undisputedly part of the business assets of the respondent, so that depreciation on them was in principle permitted. Furthermore, the properties in dispute do not qualify as current assets and a restriction of depreciation possibilities is therefore not appropriate. Dismissal of the appeal.
Judgment of 14 February 2020 (2C_317/2018): State and municipal taxes 2011 (Aargau); Mr and Mrs A. and Mr B. ran an agricultural holding during the 2011 tax period. The agricultural business assets included a plot of land with a value of 74.47 ares. A section of this land had been zoned in and, following the granting of a permit, it was parceled out. Subsequently, several plots of land were sold to independent third parties. In the first step, the legal nature of the plots in dispute was disputed and examined. In a second step, the Federal Supreme Court had to examine whether and, if so, how and in what amount the realised capital gain should be recognised. The Federal Supreme Court came to the conclusion that from the time of the parcelling out, the building plots were no longer protected by land law and that no evidence could be provided of an intermediate private withdrawal of the plots in dispute. Accordingly, the entire realised capital gain was to be recorded with income tax instead of with cantonal property gains tax. Rejection of the appeal.
Judgment of 19 February 2020 (2C_1059/2017): State and municipal taxes and direct federal tax 2006 (Ticino); Acquisition of own shares; Liquidation surpluses; As the tax law conditions for the acquisition of own equity securities pursuant to Article 4a(1) of the Swiss Federal Taxation Act (VStG) and the FTA-SC No. 5 of 19 August 1999 are not fulfilled, the taxable income offset by the tax authorities of the Canton of Ticino in the form of liquidation surpluses could be offset against the taxable income of the company pursuant to Article 20(1)(c) in conjunction with Article 20(1)(b) of the Swiss Federal Taxation Act (FTA-SC). Art. 19 para. 1 lit. c StG Ticino could not be claimed. Approval of the taxpayer's complaint.
Judgment of 13 February 2020 (2C_947/2019): Tourist tax of the municipality of Naters (abstract control of norms); In the case of cost assessment tax (visitor's tax), the revenue may only be used for the corresponding cost assessment purpose No arbitrary increase of the tax from Fr. 2.50 to Fr. 4.50 if higher expenses can be shown. There is no unequal treatment if the different collection method is based on reasons of practicability. Dismissal of the appeal of the parties to the proceedings.
Judgment of 19 February 2020 (2C_187/2017, 2C_189/2017), scheduled for publication Direct Federal Tax and State and Municipal Taxes 2012 (Zurich); underpriced letting may also be made to a related legal entity. However, taxation of market rent requires an explicit legal basis or the existence of tax evasion. Rejection of the taxpayer's complaint.
Judgement of 20 February 2020 (2C_748/2018): Direct federal tax and state and local taxes (Bern); withholding tax on pensions from occupational pension schemes, right of taxation confirmed by Sri Lanka and the Philippines on the basis of DTAs as states of residence; dismissal of the tax administration's appeal.
Judgment of 21 February 2020 (2C_923/2018): Value Added Tax (2007-2012); In the present case, at least part of the assets were transferred as a result of a contract entitled "Sale of vehicles and transfer of the taxi permit/operating licence", which led to partial tax suzucession; approval of the appeal by the FTA and rejection of the appeal in the lower instance.
Judgment of 25 February 2020 (2C_406/2019): Accommodation fees; The lower instance did not violate any federal law by finding, after examining the use of the funds for the accommodation fee, that, taking into account all the inflows of funds in the area of tourism promotion, there was a surplus with which a substantial part of the personnel costs could be covered; dismissal of the appeal by the party liable to pay the levy.
Judgment of 28 February 2020 (2C_550/2019): Accommodation charges; calculation of gift and inheritance tax (Geneva); partial acceptance of the appeal by the taxable person.