Overview of tax law decisions of the Swiss Federal Supreme Court published between March 13 - 19, 2023:

  • Judgment of February 7, 2023 (9C_646/2022): State and municipal taxes and direct federal tax 2019 (Ticino); subject of the appeal is the rate-determining imputed rental value of his property in Italy. The Ticino tax authorities set the imputed rental value at 6% of the assessed value, less flat-rate maintenance costs. During the proceedings, the taxpayer could not credibly demonstrate that the property was uninhabitable and therefore no imputed rental value should be taken into account. In particular, private appraisals, as argued by the taxpayer in the course of the proceedings, are already fundamentally unsuitable for determining an imputed rental value. Abroad, the flat-rate determination of the imputed rental value can only be deviated from in a very restrictive manner and if a public expert opinion is available. However, high standards must be applied to such an appraisal in order to ensure comparability with Swiss valuation practice. Dismissal of the taxpayer's appeal.
  • Judgment of February 15, 2023 (2C_131/2021): State and municipal taxes 2012 (Aargau); In the context of a tax-neutral restructuring of the A. cooperative domiciled in Basel, the Federal Supreme Court had, in its ruling of January 23, 2020 (2C_57/2018, cf. our article of February 23, 2020, granted the permanent establishment canton of Aargau a right of taxation on the tax-systematic realization of hidden reserves on intangible property rights, provided that for the 2012 tax period such hidden reserves could be allocated to the canton of Aargau at all. At the same time, the Federal Supreme Court referred the case back to the lower court for additional fact-finding in order to clarify to what extent the group trademark "A" had been established, maintained and managed by the head office in Basel, whether the expenses had been charged to the head office for accounting purposes and whether the trademark policy had been determined there. In the subsequent clarification of the facts, the lower court found that all functions were performed centrally in Basel, but allocated a share of the hidden reserves to the regional cooperatives with reference to the margins paid by them within the group on centrally purchased products. In doing so, however, the lower court contradicted a number of preliminary legal decisions already made by the Federal Supreme Court in the remittal decision, which is arbitrary and constitutes a material denial of justice. This leads without further ado to the annulment of the contested decision. Since the hidden reserves are to be allocated in full to the Basel head office, no tax substrate remains in the Canton of Aargau in 2012 on the "A" brand. This result is also in line with the approach of the OECD or the so-called DEMPE functional concept. Dismissal of the taxpayer's appeal and referral back to the lower court.
  • Judgment of February 10, 2023 (9C_605/2022): Staats- und Gemeindesteuern 2016 (Basel-Stadt); In dispute is whether the complainant A. can prove effective costs for the properties that exceed the respective standard deduction. After the tax authorities have recognized certain effective costs, the core issue is the deduction for the costs of third-party administration. In the present case, there is the particularity that the complainant manages her properties in her own person as an employee of B. GmbH, whose sole shareholder is her daughter. The third-party administration was recognized in principle, but it was examined whether the costs claimed could stand up to a third-party comparison. In order for a third-party comparison to be made, it must be established which concrete services the property management comprises. The complainant was not able to provide legally sufficient evidence for the administrative expenses it claimed. Contrary to her opinion, she would have had to submit promptly prepared and detailed work reports so that a third-party comparison would have been possible at all. Dismissal of the appeal of taxpayer A.
  • Judgment of February 20, 2023 (9C_723/2022): Staats- und Gemeindesteuern und direkte Bundessteuer 2008 (Zurich); Rechtliches Gehör; The lower instance as well as the lower court did not violate the obligation to give reasons for official decisions (Art. 29 para. 2 BV), since the lower court (subsequently) gave sufficient reasons for its decision. Dismissal of the taxpayer's appeal.

Decisions on non-admission and write-offs:

Decisions are listed chronologically by publication date.