Overview of tax law decisions of the Swiss Federal Supreme Court published between June 5 - 11, 2023:

  • Judgment of April 20, 2023 (9C_679/2021): Staats- und Gemeindesteuern und direkte Bundessteuer 2015 (Zurich); In dispute was the existence of a transposition in connection with a management buy-out, in the context of which the taxpayer had transferred its shares in C. AG to E. AG, which it controlled, on account of a liquidation. As can be seen from the wording of the law - supported by the intention of the legislator - the provision on transposition does not provide room for an economic approach taking into account all circumstances which would be connected with the relevant transaction (chain). The legislator did not intend to limit the taxable transactions to those in which distributions are actually made. Furthermore, the legal standardization has "objectified" the facts of transposition in the sense that the subjective motives that cause a shareholder to make a transposition are irrelevant. Dismissal of the taxpayer's appeal.
  • Judgment of May 10, 2023 (9C_660/2022): State and municipal taxes 2018 (Zug); hidden profit distribution vs. sponsoring expenses justified by business. In the present case, the sister company A.A. AG took over the interest-free loan with subordination from a reorganization, investment and shareholder agreement of B.A. AG and paid F.E. AG CHF 850k. Due to the accumulated deficit of F. AG, the loan was fully written off at the end of 2018. A.A. AG benefited from the advertising effect of the "sponsoring" and was able to increase its brand awareness in the Zurich, Zug and Lucerne area and win new orders. In contrast, consideration, in particular sponsoring services to be provided by F.E. AG, are not mentioned in the contract. In order for expenses incurred in connection with the assumption of intra-group obligations arising from sponsoring agreements to be recognized as justified on business grounds, records of the allocation of benefits (e.g. sales key) and intra-group agreements must be available. In the present case, however, a reorganization obligation of the sister company was undertaken without a contract and without consideration, which an uninvolved third party would not have assumed without a joint participation relationship. Dismissal of the appeal of the taxpayer A.A. AG.
  • Judgment of 16 May 2023 (9C_111/2023): VAT 2013-2016; Discretionary assessment; Input tax deduction; In the present case, the taxable complainant is not able to provide evidence for the payment of input taxes. The FAC found significant deficiencies in the complainant's accounting. Furthermore, due to the dissolution of the service provider companies, it was no longer possible to verify the payment of invoices with them. In addition, the signatures confirming the payment of VAT were made by a person who was not authorized to commission service providers (see our article of September 20, 2020). The complaint is dismissed as obviously unfounded.
  • Judgment of 16 May 2023 (9C_74/2023): State and Municipal Taxes and Direct Federal Tax 2008-2016 (Valais); In dispute is whether the back taxes may be levied for the years 2008 - 2016, contrary to the made "agreement" with the tax office that the back tax will be levied only for the years 2014 - 2016. In the present case, the letter cannot be considered as a tax ruling, because the content did not refer to a planned transaction, but to an already realized fact. A procedural agreement is also not given, but a tax agreement. Such tax agreements are only allowed if the law permits it. 1% of the undeclared assets belonged to the deceased husband and 99% to the wife. By agreeing that in exchange for maintaining the tax liability of the surviving wife until 2019 in the Canton of Valais, all of the undeclared assets of the couple would fall under the simplified subsequent taxation for heirs according to Art. 153a DBG without differentiation by owner, the cantonal tax administration and the complainant made a tax agreement which has no legal basis and is therefore void. The appeal on the protection of legitimate expectations according to Art. 9 BV was not successful. Dismissal of the appeal of the community of heirs A.

Non-occurrence / write-off:

Decisions are listed chronologically by publication date.