Decisions of the Swiss Federal Supreme Court (CW14 - 2022)

Overview of the tax law decisions of the Swiss Federal Supreme Court published between 4 - 10 April 2022:

Judgment of 14 March 2022 (2C_792/2021): Withholding tax 2013 and 2014 (Geneva); in dispute is whether A., as the sole shareholder of B. AG, is entitled to a refund of withholding tax on monetary benefits of B. AG. For the year 2013, the question is based on Art. 23 aVStG and for the year 2014 on the current Art. 23 VStG. In the first tax return submitted in 2013, A. did not mention these benefits. Only when the FTA carried out an inspection of B. AG in July 2017 did he report them to the cantonal tax administration. Thus, he forfeited his refund claim with respect to the year 2013. Under the new law, there is a paragraph 2 in Art. 23 VStG, which applies if the declaration was not made in time. However, it is required that the declaration was not made due to negligence. However, A. was also aware of the pecuniary benefits in 2014. The failure to declare was not negligent, but intentional. Dismissal of the taxpayer's appeal.
Judgment of 16 March 2022 (2C_1054/2021): Customs duties; advance on costs; The dispute in the present case was whether the Federal Administrative Court's refusal to recognise the complainant's asserted claim to free legal assistance was lawful. The complainant had not formally contested with the Federal Administrative Court the amount of the advance on costs that he had requested, nor the deadline that had been set for him to pay this advance on costs. Moreover, the complainant had not provided the Federal Administrative Court with any documents showing that he was in need. The Federal Supreme Court concludes that it is in no way to be considered proven that the complainant does not have sufficient financial means. Dismissal of the appeal.
Judgment of 8 March 2022 (2C_189/2022): VAT 2012-2017; The question in dispute was whether the lower court was correct in concluding that the taxpayer had missed the 30-day appeal deadline. The taxpayer receives its mail via an external service provider. This service provider maintains a "virtual" post office box at the post office. The mail received there is physically delivered to the service provider from Monday to Friday. According to the "Track & Trace", the relevant document was delivered on Saturday, 30 October 2021 (natural presumption for proper delivery due to "A Mail Plus" dispatch). According to the lower court, the time limit therefore began to run on Sunday, 31 October and expired on 29 November 2021. The taxpayer's submission on 30 November 2021 was therefore not in time. The taxpayer argues against this that the correspondence did not physically reach the hands of the external service provider until Monday, 1 November 2021. The Federal Supreme Court confirms its earlier case law on the "virtual" P .O. box (see Federal Supreme Court ruling 2C_463/2019 and our article), according to which the "virtual" P.O . box is comparable to the voluntary withholding order and the deadline is neither suspended nor extended as a result. Moreover, the taxpayer had to take into account the conduct of its representative (closing of the offices at the weekend, late forwarding of the document to the taxpayer). Dismissal of the taxpayer's appeal.
Judgement of 8 March 2022 (2C_323/2021): State and municipal taxes of the Canton of Zurich 2017, tax domicile; the taxpayers had moved their tax domicile from (two municipalities in ZH) to GR after their marriage in 2014. This was recognised by ZH for the tax periods 2014-2017 even without further clarification. For 2017, on the other hand, ZH again claimed unrestricted tax domicile after an in-depth examination of the taxpayer's realities of life. Ultimately, it had to be examined whether there had been a significant change in the factual situation in favour of the canton of ZH, which, according to case law, allowed it to reassert its tax sovereignty. The Federal Supreme Court answered in the affirmative with the following considerations: "However, the purpose of the requirement of a significantly changed factual situation resulting from case law [...] cannot be to prevent the authorities, due to (possible) past omissions, from examining the circumstances of life more closely at a later point in time [taking into account the limits of their duty to cooperate] and - on the basis of the comprehensive information provided by the taxpayers - from then claiming taxation jurisdiction anew". Dismissal of the taxpayers' appeal against ZH, upholding of their appeal against GR.
Rulingof 16 March 2022 (2C_465/2021): State and municipal taxes Solothurn and direct federal tax 2019; transfer of debt interest and debt interest surplus in private assets. In the present case, the taxpayer, who is resident in Switzerland and owns real estate in Switzerland ( DE ), considered the tax separation to be contrary to the DTA. However, the DTA CH-DE does not contain any provisions on how debts and debt interest are to be allocated in the international relationship. Furthermore, tools and machinery are not deductible as property maintenance costs. Dismissal of the taxpayer's appeals.
Judgment of 18 March 2022 (2C_662/2021; 2C_663/2021): Administrative assistance DTA CH-SE; The FTA raises the legal question of whether and, if so, to what extent the transmission of requested information is permissible for a requested period for which a foreign statute of limitations is or has occurred. The requirement of probable relevance is met if, at the time the request is made, there is a reasonable possibility that the requested information will prove to be relevant. As the requested authority, the FTA does not have to clarify any questions that concern the foreign tax proceedings. According to settled case law, requests for administrative assistance must be assessed at the time they are submitted. Similarly, the requesting authority does not specify a date in the request after which the requested information would no longer be useful. The transmission of information is therefore permissible as long as it is not manifestly clear at the time of submission of the request for assistance that the foreign statute of limitations has already occurred for a requested period. This also applies if the requesting authority indicates on its own initiative that the statute of limitations may occur in the future, but at the same time it is clear from the request that the requested information is still useful. Appeal by the FTA upheld.