Decisions of the Swiss Federal Supreme Court (CW 14 - 2024)

Overview of the tax rulings of the Swiss Federal Supreme Court published between April 1 - 7, 2024:

Judgment of February 22, 2024 (9C_431/2023): Tourism promotion tax of the municipality of U./VS 2019-2022; The dispute was whether the municipality of U./VS had exceeded the authority granted to it by cantonal law by subjecting the non-cantonal landlord of a vacation apartment to the municipal tourism promotion tax. The BGer examines the violation of cantonal law only from the point of view of the prohibition of arbitrariness. The FSC concedes to the appellant that the wording of the cantonal law does not provide any indication of a tax obligation for non-cantonal landlords of vacation apartments. In view of teleological and constitutional considerations, the contrary view of the lower court cannot be described as arbitrary, at least in terms of the result. Dismissal of the appeal of the taxpayer.
Judgment of March 12, 2024 (9C_475/2023) - intended for publication: Direct federal tax and cantonal and municipal taxes 2017-2018 (Schaffhausen); property and imputed rental value of foreign real estate; in dispute is the imputed rental value and property tax value of an Italian Stockerwerk property owned by taxpayers resident in Schaffhausen. The taxpayers declared the property tax value at 60% of the market value and the imputed rental value at 3.5% thereof. Furthermore, they deducted the cost of the furniture, which was purchased together with the condominium, from the acquisition costs. With regard to the latter, the FSC followed the tax administration, which did not allow this deduction due to the lack of mention in the purchase agreement. The tax administration, in turn, set the property tax value at 80% of the market value and the imputed rental value at 5.0%. The argument put forward against this - that the canton of Schaffhausen values properties within the canton at a maximum of 70% of the market value - did not hold up before the Federal Supreme Court. Specifically, the Federal Supreme Court stated that a "target median value of 70%" is contrary to federal law, whereas an approach of 80% is generally not objectionable, as the fact that foreign countries do not necessarily have a system of public notarization of the purchase contract and entry in the land register may be taken into account. Even if a canton applies 70% to domestic properties and 80% to foreign properties, this does not constitute a systematic disadvantage that cannot be based on any proper justification. The same applies mutatis mutandis to the imputed rental value, particularly in light of the old circular on the determination of taxable rental income from residential properties, which is why a net imputed rental value of 5.0% is not objectionable. Dismissal of the taxpayer's appeal.
Judgment of March 19, 2024 (9F_3/2024): Direct federal tax and cantonal and communal taxes 2021 (Valais); dismissal of the request for revision.
Judgment of March 5, 2024 (9C_745/2023): Direct federal tax and cantonal and municipal taxes 2020 (Zug); at issue is whether the tax administration was right to offset an imputed rental value for a vacant condominium. Objective uninhabitability due to defects has not even been rudimentarily demonstrated in the present case. Moreover, anyone who only advertises in free ads in the surrounding Migros and Coop stores is obviously not making any serious efforts to let the property. The fact that the taxpayer had interested parties despite the lack of search efforts obviously speaks against objective unlettability. Dismissal of the taxpayer's appeal.
Judgment of March 15, 2024 (2C_795/2022): Administrative assistance DTA CH-FR; the complainant raises the question of whether administrative assistance can be provided if the request for administrative assistance relates to a person who died before the entry into force of Art. 18a StAhiG on November 1, 2019, and whether this provision applies to requests for administrative assistance or tax periods prior to November 1, 2019. The dispute in this case is whether the FAC rightly confirmed that the administrative assistance requested by the requesting authority on May 11, 2016 must be provided with regard to the bank account linked to C., who died in October 2018. The request for administrative assistance of May 11, 2016 was the subject of a landmark ruling of July 26, 2019 (see BGE 146 II 150, see our articles of July 27, 2019, December 8, 2019 and December 4, 2022). The appellant unsuccessfully accuses the FAC of having confirmed the transmission of information even though certain tax periods affected by the request for administrative assistance were time-barred under French law or the deceased C. had left France in 2011. These objections must be raised before the requesting state. The question of whether information of a deceased person is still useful for the requesting state is also a question of the domestic law of the requesting state. Furthermore, Art. 18a StAhiG is a procedural and not a substantive provision. The complaint regarding a violation of the principle of speciality is also unfounded. Dismissal of the appeal by the heir of C.
Judgment of March 21, 2024 (2C_617/2022): Administrative assistance (MAC/CH-BE), costs; the Belgian Federal Public Finance Service submitted five requests for international tax administrative assistance in 2019, which were later withdrawn. The FAC ruled that the FTA must pay compensation to the companies affected by the request, as the conduct of the requesting authority was attributable to the FTA; the FTA lodged an appeal against this; dismissal of the FTA's appeal.