Overview of the tax law decisions of the Swiss Federal Supreme Court published between May 26 and June 1, 2025:
- Judgment of 2 May 2025 (2C_116/2023) - intended for publication: Administrative assistance (DBA CH- FR ): The dispute concerned a request for administrative assistance from the French Direction Générale des Finances Publiques, in which it specifically requested information about a business account belonging to the AA concerned by the request. AA worked as a lawyer and opened the business account using Form R (declaration upon opening an account or deposit by a Swiss lawyer/notary or a Swiss law/notary firm). In France, a criminal investigation was carried out against AA on suspicion of serious tax fraud, undeclared work, and money laundering. In particular, AA is alleged to have cashed anonymous checks into the business account. The Federal Administrative Court confirmed the request for administrative assistance but, citing attorney-client privilege, ordered the FTA to black out a name on the account statements because it could indicate a lawyer-client relationship. The Federal Supreme Court rejected the FTA's position that attorney-client privilege only applies to files in the lawyer's possession. In contrast, the Federal Supreme Court confirmed that attorney-client privilege does not apply if the request for administrative assistance, or the purpose pursued thereby, is directed against the attorney himself. The Federal Supreme Court then confirmed the redaction already ordered and extended it to legal entities listed in the bank records that could provide evidence of an attorney-client relationship.
- Judgment of May 7, 2025 (9C_195/2025): State and municipal taxes 2003 – 2008 and 2010 (Thurgau); The issue is whether the lower court correctly confirmed the freezing order concerning the legally established tax claim. Taxpayer A. only raises a very appellate challenge to the invalidity, citing his lack of personal affiliation to the Canton of Thurgau. It should be recalled that the freezing procedure is not equivalent to a simultaneous or subsequent assessment procedure. The subject matter of the assessment cannot be arbitrarily transferred to the freezing order. What the taxpayer argues, however, amounts directly to a renewed substantive review of the assessment orders, even though they have long since become legally binding. If the taxpayer has already chosen to refrain from any participation in the assessment proceedings for years, which he would have been obliged to do, he must also accept that the assessment proceedings, which have been legally concluded, cannot be reopened now, at the mere stage of the seizure of assets. Dismissal of the taxpayer's appeal.
- Judgment of April 25, 2025 (9C_488/2023): State and municipal taxes 2015-2018 (Zurich); Tax domicile; A GmbH was founded in 2015 and registered in the commercial register of the Canton of Zug. Its primary purpose is to advise football players and football clubs. During the disputed tax periods, it rented an office in this canton for CHF 350 per month. The sole shareholder and managing director, B, resided in the Canton of Zurich. He primarily traveled abroad for business purposes, but also in Swiss cities outside these two cantons. In the Canton of Zurich, A GmbH covered the costs of a rented room, which, however, was unsuitable for business use. Virtually no expenses were documented in the Canton of Zug, but in the Canton of Zurich, expenses for numerous meetings in restaurants were documented. In a preliminary decision of March 15, 2021, the Zurich Cantonal Tax Office claimed the tax sovereignty of the Canton of Zurich. The court assumed a fictitious domicile in the canton of Zug. A GmbH's cantonal appeals were unsuccessful. The Federal Supreme Court concluded that it had clearly not been proven to the required standard of proof that the predominant management activities were carried out at B's place of residence. The taxpayer's appeal was upheld.
- Judgment of May 1, 2025 (9C_13/2025): Cantonal and municipal taxes 2020 (Geneva); A. worked in Spain from November 1, 2009, to August 31, 2016, and in Switzerland from October 1, 2016, to August 15, 2018, for Group B. Applying Art. 17d DBG, the court correctly found that the employee participation plans in question were generally subject to withholding tax at the time they were exercised. However, the period used for proportional taxation is disputed. A. fails to demonstrate that the cantonal findings, according to which the vesting period should be assumed to have ended on the day after the employment relationship ended, are arbitrary or manifestly incorrect. It must also be examined whether the court violated Art. 15 CH-ES DTA by confirming the disputed withholding tax on the employee participation plans. This is not the case. In this case, the problem is of a factual nature, in that the country of residence (Spain) and the source country (Switzerland) clearly use different numerators and denominators to tax the income from the exercise of the employee participation schemes in question proportionally. A solution to this problem is neither provided for in the OECD Model Tax Convention, as it does not involve a conflict of qualification, nor is it specifically addressed in the CH-ES DTA. Consequently, Switzerland does not have to waive its right to tax. Dismissal of the appeal by taxpayer A.
- Judgment of May 1, 2025 (9C_489/2024) - scheduled for publication: Direct Federal Tax and State and Municipal Taxes 2015–2018 (Zug): The subject of the dispute was the question of whether the lower courts in the Canton of Zug were right to refuse to entertain a request for review filed by the appellant company or to confirm their non-admission. The company, with its registered office in Zug, filed the request after the Tax Appeals Court of the Canton of Zurich had legally confirmed the tax domicile decision of the Zurich Tax Office. The cantonal courts rejected the request for review due to a missed deadline. The Federal Supreme Court used this case as an opportunity to clarify two fundamental questions. First, the Federal Supreme Court clarified that intercantonal double taxation does not constitute a non-statutory or supra-statutory ground for review, and that there are no grounds other than those provided for by law that justify a right to review a final assessment. Secondly, the Federal Supreme Court held that in cases of intercantonal double taxation, the authorities are not precluded from reconsidering a final assessment. However, in this case, the authorities are permitted to make the reconsideration subject to a time limit—in this case, 90 days. It is therefore not objectionable under federal law to link the start of the time limit to the notification of the tax domicile decision. The company's appeal was dismissed.
- Judgment of May 5, 2025 (9C_294/2024): Direct federal tax and cantonal and municipal taxes 2021 (Vaud); A. lodges two appeals, one against the order of April 17, 2024, regarding the payment of an advance on costs (9C_294/2024), and one against the judgment of May 14, 2024, which deemed A.'s appeal against the objection decision inadmissible because the advance on costs had not been paid (9C_332/2024). The order of April 17, 2024, is a procedural interim decision that cannot be appealed independently, but only together with the final decision if it influences it (Art. 93 para. 3 of the Federal Court of Justice Act). The issue of procedural costs levied by the cantonal courts falls within the jurisdiction of the cantons, since the Federal Court of Justice Act (StHG) does not contain any provision on costs. The demand for an advance payment is expressly based on a formal cantonal legal basis. Since the present dispute falls under cantonal law, there is an increased obligation to provide reasons, which the taxpayer has failed to comply with. Inadmissibility of appeal 9C_294/2024 and dismissal of appeal 9C_332/2024 of taxpayer A.
- Judgment of May 9, 2025 (9C_462/2024): Direct federal tax and cantonal and municipal taxes 2012 (Vaud); The lower court was entitled, without arbitrary judgment, to conclude that the company held by the taxpayer had made a simulated loan to the taxpayer and to offset a hidden profit distribution. The taxpayer's appeal was dismissed.
- Judgment of May 13, 2025 (9C_51/2025): Direct federal tax and state and municipal taxes 2020 and 2021 (Freiburg). The issue is whether the maintenance costs for a property were already incurred at the time the taxpayer's father paid the costs or only when the father and the taxpayer settled the accounts. In 2020, the taxpayer had agreed with her father on an advance inheritance payment, which was to be partially paid by offsetting services for the renovation of the property in 2020 and 2021. Thus, the invoices paid by the father, to the extent of the advance inheritance claim, represented debt repayment at the time of payment. The taxpayer's appeal was upheld.
Non-occurrence:
Decisions are listed chronologically by publication date.
