Overview of the tax law decisions of the Swiss Federal Supreme Court published in the week of 21 - 27 June 2021.
- Ruling of 19 May 2021 (2C_86/2021): State and municipal taxes 2014 and 2015 (Zurich); intercantonal double taxation; the taxpayer was unable to prove that he had actually moved his place of residence to the canton of Schwyz. From the extensive bank account and credit card documents, there were hardly any expenses that suggested a local presence in Schwyz. The tenancy agreement for the flat in the canton of Zurich occupied by his partner was in his name until 31 December 2016. He also had no personal relations in Schwyz. His centre of life was therefore in Zurich. Since he had already been assessed in the canton of Schwyz with legally binding effect, the canton of Schwyz must revoke the already legally binding assessment and also refund the tax amount to the taxpayer. Dismissal of the taxpayer's appeal against the canton of Zurich.
- Judgment of 21 May 2021 (2C_562/2020): VAT, tax periods 2008-2009 and 2010-2012; In the present proceedings, the Federal Supreme Court had to examine whether there was a violation of the acceleration requirement regarding the complainant's voluntary declaration. Furthermore, the Federal Supreme Court had to examine whether the purchase of the disputed services was in principle subject to value added tax or purchase tax and, if so, whether the services were exempt from tax. The Federal Supreme Court came to the conclusion that the acceleration requirement was not violated in this case, as numerous complex factual and legal questions arose in casu, which triggered an increased clarification effort. Furthermore, the complainant's purchase of services was subject to the purchase tax and a tax exemption was not applicable in the present case. However, due to the fact that the tax claim for the 2010 tax period had in the meantime become time-barred, the appeal had to be partially upheld.
- Judgement of 18 May 2021 (2C_1022/2020): Direct Federal Tax and State and Municipal Taxes 2010 (Zurich); nullity of a discretionary assessment; if, despite a reminder, the self-employed person does not submit either an annual financial statement or a business statement or a tax return, he or she is not fulfilling his or her procedural duty to cooperate. Against this background, it is not objectionable that the assessment authority bases its discretionary assessment on an average income and on the assets from previous periods, despite considerable fluctuations in the amount. Furthermore, a discretionary assessment is only void if the assessment authority deliberately and arbitrarily assesses the tax factors to the detriment of the taxpayer. If the legal error is less significant, the taxpayer can simply contest the discretionary assessment, whereby the burden of proof is reversed in this case. In the present case, the tax return, which was only submitted after the already late objection, is no longer to be taken into account. Dismissal of the taxpayer's appeal.
- Judgment of 3 June 2021 (2C_881/2020): State and municipal taxes 2015 (Zurich): The conclusion of the lower court that the natural presumption in favour of the main tax domicile in the canton of ZH was invalidated for the 2015 tax period is obviously incorrect due to an untenable assessment of the evidence. The two pieces of circumstantial evidence (rent of a 3.5-room apartment as of 1 June 2015 and acceptance of the newly constructed residential building on 17 December 2015 in the municipality in the Canton of LU) possibly indicate that the respondent intended to move her residence to the municipality in the Canton of LU in the future. However, there is no evidence that the respondent actually changed her residence in 2015. For a tenable assessment of the evidence, it would have been necessary for there to be at least invoices or receipts from the removal and cleaning companies, as well as valid evidence that the respondent had actually lived in the 3.5-room flat and had already stayed predominantly in the municipality in Canton LU in 2015 (e.g. by means of receipts for purchases and other living expenses). In summary, the respondent's main tax domicile in the 2015 tax period was in the canton of ZH and the tax office was right to claim (cantonal) tax jurisdiction. Appeal of the tax office upheld.
- Ruling of 19 May 2021 (2C_118/2021): Direct Federal Tax and State and Municipal Taxes 2012-2013 (St. Gallen); Proof of the actual element of the deduction claimed for tax purposes; Whether an expense is justified for business purposes is only questioned if the cash flow affecting income is proven. The decision of the lower court not to grant expenses for work by third parties as a deduction for tax purposes and to offset them as a hidden profit distribution is correct in the absence of proof of performance and consideration (actual component of the expense) by the taxpayer complainant. If taxable persons claim that funds have flowed abroad, they are subject to a particularly qualified duty of cooperation in this regard. They must not only name the recipient of the payment, but also explain the entire circumstances that led to the payment. The taxpayer is required to produce the contracts, correspondence and bank records. Since the receipts or invoices presented as well as the agreement or the consultancy contract with the third party are neither able to document the business transaction nor the facts and are unclear, it results that the respondent was able to shake the main evidence of the accounting complainant by being able to present circumstances that cast considerable doubt on the payments made abroad. Accordingly, these are to be offset. Dismissal of the taxpayer's appeal.
Decisions are listed chronologically by publication date.
