Overview of the tax law decisions of the Swiss Federal Supreme Court published in the week of 7 - 13 June 2021.
- Judgment of 10 May 2021 (2C_166/2020) - official publication planned: Tax exemption; in dispute is whether the tax exemption in place since 2015 violates Art. 56 lit. g DBG. In order to restructure its commercial activities and separate them from its non-material purpose, the A. Foundation transferred its activities in the field of community catering to D.H. AG by means of an asset transfer agreement with retroactive effect as of 1 January 2015. The foundation holds the entire share capital of D.H. AG. The acquisition and management of significant equity interests in companies are of public interest if the interest in maintaining the company is subordinate to the public interest purpose and no administrative activity is performed. The mere fact of being the sole or majority shareholder does not indicate a priori that a foundation is carrying out an administrative activity in a company and consequently excludes its exemption within the meaning of Art. 56 lit. g DBG. The transfer of assets did not result in any consideration on the part of D.H. AG in 2015. Later, the parties entered into a loan agreement whereby the foundation lent its company the amount of CHF 25,470,000 after receiving a corresponding amount from it in the form of a special dividend. The contested judgment shows that in 2017, 87.14% of the assets of the A. Foundation were invested in one way or another in D.H. AG and that 94.14% of its financial income came from D.H. AG. This situation inevitably leads to mutual financial dependence. The possibility of pursuing idealistic purposes in the long term depends almost exclusively on the development and survival of the former company, even if it now formally belongs to the D. Group. Approval of the tax office's complaint.
- Judgment of 20 May 2021 (2C_900/2020): Direct Federal Tax and State and Municipal Taxes 2014 (Geneva); The dispute in this case is the offsetting of a litigation provision set up in 2014 at A. AG. The taxpayer did not prove that the French tax authority had asserted joint and several liability for the tax amount, as the tax adjustment proceedings were only directed against B, who holds 90% of A. AG, which in turn holds 100% of the French C. AG. Thus, there is no direct risk of loss that would justify the creation of a provision. Dismissal of the taxpayer's appeal.
- Judgments of 27 May 2021 (2C_14/2021) and (2C_15/2021): Direct federal tax, cantonal and communal taxes 2004 to 2007 (Geneva); Tax evasion; In the present proceedings, the Federal Supreme Court had to examine whether the requirements for a non-penalised voluntary declaration were met and thus whether criminal proceedings against the taxpayers could be waived. The Federal Supreme Court came to the conclusion that the requirements for a non-punishable voluntary declaration were not met in the present proceedings. However, due to the 15-year statute of limitations, the Federal Supreme Court upheld the taxpayers' appeals to the extent that the right to assess tax for the 2005 tax period had lapsed. The taxpayers' appeals are partially upheld, but otherwise dismissed.
- Judgement of 6 May 2021 (2C_587/2020): State and municipal taxes 2003-2004 (Aargau); revision and nullity; the assessment authority charged the taxpayer with income from embezzlement although he was acquitted in the criminal proceedings. The assessments became legally binding because the advance on costs had not been paid. Due to various deficiencies, the appeal against the decision to dismiss the case is inadmissible. Furthermore, the actual breach of duty by the assessment authority does not reach the required degree of severity for the assumption of nullity. Dismissal of the taxpayer's appeal.
- Judgment of 27 April 2021 (2C_60/2020): Direct federal tax and state and municipal taxes 2008-2013 (Geneva); withholding tax, post-tax proceedings and tax evasion; approval of the taxpayer's appeal and referral back to the lower court; see our article of 16 May 2021....
Decisions are listed chronologically by publication date.
