Decisions of the Swiss Federal Supreme Court (CW 14 - 2021 )

Overview of the tax law decisions of the Swiss Federal Supreme Court published in the week of 5 - 11 April 2021.

Judgment of 18 March 2021 (2C_420/2020): Direct Federal Tax and State and Municipal Taxes 2012 (Jura); The dispute in the present case is, on the one hand, whether the property is part of the taxpayer's business assets and, on the other hand, the amount of the vehicle costs that the taxpayer can deduct from his self-employed income. In the present case, the taxpayer carried on his self-employed business in the property in question, then sold it in 2012 and has since moved his business to another location. This shows that the property was held as a business asset. The lower court reduced the amount of deductible travel expenses by the private portion. The taxpayers could not prove that they incurred higher costs. Dismissal of the taxpayers' appeal.
Judgment of 11 February 2021 (2C_603/2020): Direct federal tax and cantonal and communal taxes 2017 (Lucerne): The dispute in this case is whether the complainants can claim litigation and legal costs incurred as a result of an objection and an administrative court complaint regarding an approved construction project on the neighbouring property as property maintenance costs. In order to qualify attorney's fees and court costs as deductible property maintenance costs, it is necessary that the expenses serve to secure the property or its use. This is to be assumed if the taxpayer at least plausibly demonstrates the adverse effect of the construction project on the taxpayer's own property. In view of the fact that the legitimacy of the complainants in the appeal proceedings under the building law had been affirmed without further ado and that in these proceedings the complainant's interest in preventing the conversion had been accorded a value to be taken into account, it must be assumed that the complainants were able to credibly demonstrate a reduction in the value of the property in the relevant sense. Thus, the litigation and attorney's fees are deductible. Approval of the appeal.

Non-entry decisions: