Overview of the tax law decisions of the Swiss Federal Supreme Court published in the week of 23 - 29 March 2020.

  • Judgment of 4 March 2020 (2C_1/2020 and 2C_2/2020): Direct Federal Tax and State and Municipal Taxes 2012 (Valais); The complainant was qualified by the tax administration as a real estate dealer. The business assets of his sole proprietorship, which was to be transferred to a public limited company by means of a transfer of assets, consisted merely of the share of three condominium units of a superstructure. In the absence of a (partial) business, no tax-neutral restructuring is possible. Rejection of the taxpayer's complaint.
  • Judgment of 9 March 2020 (2C_285/2019): Direct federal tax and cantonal and communal taxes 2013 (Valais); distinction between settlement payments in the context of matrimonial property disputes and maintenance payments in connection with forwarded income from employee profit-sharing schemes which had been allocated to the taxpayer in previous years. With regard to the allocations that had been made prior to the 2010 divorce decree, it was first necessary to examine whether some of the income realised in 2013 had accrued directly to the ex-wife (and not to the taxpayer). This was denied, as the amount realised was directly related to the taxpayer's status as an employee. It was then examined whether the transfer to the ex-wife constituted a deductible maintenance payment. This was also denied, as the interpretation of the divorce convention had shown that the employee shares already allocated were to be divided within the framework of the matrimonial property dispute and were not intended as maintenance payments. In contrast, the forwarding of part of the employee shares allocated only after the conclusion of the divorce convention and realised in 2013 in accordance with the convention qualifies as deductible maintenance. Partial approval of the taxpayer's appeal.
  • Judgment of 9. March 2020 (2C_255/2019): Direct Federal Tax 2011 (Thurgau); The taxpayer has been running an agricultural business in the canton of Thurgau on a self-employed basis since 2005 and had previously operated an agricultural business in the canton of Schwyz; Until the 2011 tax period, he was the owner of two pieces of land there (farmhouse, meadow and farmland), which he leased after his departure in 2005; There was a reversal with the tax administration of the canton of Schwyz, according to which the land was allowed to remain in the business assets until the end of the lease On the occasion of the rezoning of the two plots of land into the building zone and the subsequent release from the subordination to the rural land law, the taxpayer sold the plots of land in 2011. In his 2011 commercial law financial statements, the taxpayer transferred the land from business to private assets; the transfer was disputed before the Federal Supreme Court and had to be examined as to whether the land located in Canton Schwyz had been privately taken. The mere recording and announcement of the private withdrawal is a weighty indication, but as such cannot bring about a mass redistribution if the alternative property continues to fulfil its previous technical and economic function; in the present case, there is no externally perceptible change in function. In addition, the taxpayer has expressed to the Tax Administration of Canton Schwyz the wish that the properties in dispute should continue to belong to the business assets - despite the Court's abandonment and move to Canton Thurgau; the reversal was justified on the grounds that a "return to self-management is not excluded"; dismissal of the taxpayer's complaint.

Non-occurrence decisions / inadmissible complaints:

Decisions are listed chronologically by publication date.

Tax topics covered in this post:
Profit Tax
Income Tax