Decisions of the Swiss Federal Supreme Court (CW 15 - 2024)

Overview of the tax rulings of the Swiss Federal Supreme Court published between April 8 - 14, 2024:

Judgment of March 5, 2024 (9C_774/2023): State and communal taxes 2009-2010 (Vaud); The limitation period for assessment stands still regardless of whether the tax authority can be accused of excessively long proceedings. Dismissal of the taxpayer's appeal.
Judgment of March 26, 2024 (9C_592/2023): The offsetting of non-cash benefits in post-tax proceedings was to be examined; according to the Federal Supreme Court, in deviation from the usual rules on the burden of proof, a shareholder who is also a corporate body and/or controlling shareholder of the company must dispute the existence and amount of a non-cash benefit claimed by the assessment authority in detail. If he fails to do so or limits himself to general statements, the assessment authority may assume that the set-off legally assessed at company level is equally justified vis-à-vis the shareholder. In the present case, the company no longer existed at the time of the notification of the pecuniary benefit, which is why no offsetting could be applied to it and the tax authority had to prove (at least circumstantially) the facts that indicate that the complainant (sole shareholder at the time) received the payments. This was successful in the present case. Dismissal of the taxpayer's appeal.‍
Judgment of February 29, 2024 (9C_496/2023) - for publication: State and communal taxes (Bern) and direct federal tax 2017; Art. 3 para. 5 DBG; In dispute is, on the one hand, the jurisdiction for the assessment of direct federal tax and, on the other hand, the domicile of the spouses. If several cantons come into question for the assessment of direct federal tax, the FTA determines the place of assessment. In the present case, the Canton of Bern was not authorized to decide on the jurisdiction for the assessment of direct federal tax. The question arises as to the consequences of this shortcoming. The decisive factor for the assumption of nullity is that the defect is so serious and obvious that it would have resulted in nullity even if the decision had not been contested in good time. This is the case here. According to the files, the tax administration of the Canton of Berne was aware at the latest during the objection proceedings that the assessment competence of the home canton of Lucerne was in question. Nevertheless, it decided on the place of assessment. This violation of Art. 108 para. 1 DBG is serious because it exacerbates conflicts of jurisdiction instead of resolving them, and it encourages the risk of several cantons assessing direct federal tax. In its ruling 2C_806/2019 of June 8, 2020 (see our article of July 26, 2020), the Federal Supreme Court refrained from referring the proceedings to the FTA despite the ruling being null and void. Consequently, for reasons of procedural economy, the responsibility for the assessment must also be decided directly here. The life situation of the appellant and his spouse must be assessed separately. The husband took up gainful employment for the Swiss Confederation in Luxembourg. In 2016 and 2017, he spent significantly more time in Luxembourg than in Switzerland. In addition, his married life also took place predominantly at the foreign place of residence. Contrary to the lower court, it is not necessary for the taxpayer to definitively sever all ties with their previous place of residence in order to transfer their domicile. In 2017, the spouse spent more time in Bern (187 days) than in Luxembourg (134 days). She also worked part-time in Bern and shared the apartment with her adult sons there at least some of the time. Even though the spouse was undoubtedly more closely connected to Bern than the complainant, her marital relationship with the complainant, which was very importantly maintained in Luxembourg, ultimately outweighed her interests in life here. The two spouses are therefore liable to tax on the basis of Art. 3 para. 5 DBG and must therefore be assessed by the authorities of the Canton of Lucerne, as the complainant's place of residence is located there. Appeal of the taxpayers upheld, nullity of the decision regarding the direct federal tax of the Canton of Berne and jurisdiction of the Canton of Lucerne.

Non-entry decisions: