Overview of the tax rulings of the Swiss Federal Supreme Court published in the week of June 24 - 30, 2019.

  • Judgment of 7 June 2019 (2C_764/2018): Administrative assistance (DTA Switzerland - Spain); administrative assistance in the area of lump-sum taxation; it is not apparent to what extent the expenditure used by the Swiss tax authorities as the basis of assessment constitutes information which could be relevant to the Spanish authority making the request, as this information does not provide any direct indication of the income earned by the taxpayers; the relevant information must be deleted; otherwise the appeal is dismissed
  • Judgment of 3 June 2019 (2C_440/2018): Direct federal tax and state and municipal taxes 2005-2011 (Zurich); additional taxes; the limited liability company rented a loft apartment in the tax periods 2005-2013, which served as its place of business; the Cantonal Tax Office of Zurich charged 71.4% of the rental expenses as a payment in kind, since 71.4% of the loft apartment had been used privately by him; the complainant submits that the lower instance had applied Article 151(1)(a) and (b). 1 DBG was infringed in that it had wrongly treated the fact that the loft apartment had been used privately by the complainant as a new fact; in particular, according to the complainant, the lower court should have noticed that he and the GmbH had rented residential and non-residential apartments. had their registered office at the same place, especially since he and the GmbH had been assessed by the same unit within the Cantonal Tax Office Zurich from 2008 at the latest; there was no evidence on the basis of which the Cantonal Tax Office Zurich should have recognised, even before the assessments concerning the tax years 2005-2011 became legally effective, that the GmbH had paid the complainant benefits in kind and that his tax returns were incomplete; dismissal of the complainant's complaint
  • Judgment of 3 June 2019 (2C_442/2018): for details see the above decision; this concerns the shareholder and chairman of the management board; the present decision, however, concerns the GmbH as the complainant.
  • Ruling of 7 June 2019 (2C_1114/2018): Direct federal tax and state and municipal taxes 2015 (Neuchâtel); five real estate companies (sister companies), at least one of which was over-indebted, with one property per company had been merged retroactively as of 1 January 2015 into another sister company; by the end of the tax period, four of the five properties contributed had been sold. One of the properties was sold for CHF 0, resulting in a loss. In particular, the deductibility of this loss and the offsetting of prior year losses of other merged companies were in question. This was denied due to the existence of tax avoidance; a merger ruling obtained in advance, which had not dealt with the pending sale, was not able to justify any protection of legitimate expectations in view of the tax avoidance ("Dès lors que l'opération de fusion décrite ci-dessus, pour laquelle la recourante a requis la neutralité fiscale, est constitutive d'évasion fiscale, la recourante ne peut rien déduire de ce ruling", E. 6).
  • Judgment of 11. June 2019 (2C_551/2018): Direct Federal Tax 2012 (Basel-Stadt); the first issue in dispute was whether the profit generated by the complainant from the sale of a property constituted income from self-employment (commercial property trading); contrary to the complainant's view, it is not objectionable if the lower court denied long-term investment as the motive for acquisition in the case of a property that the complainant acquired at the age of 19 without equity capital and sold again around five years later; moreover, it is obvious that the lower instance took into account that the complainant's father is active in real estate trading and that he himself is a limited partner in a limited partnership managed by the latter; overall, it is thus not untenable that the lower instance assumed that the complainant had specialist knowledge and considered this specialist knowledge to be a (co-)decisive element for the qualification of his activity as a commercial real estate trader; Moreover, the circumstances described by the complainant do not exclude a qualification as a commercial property dealer; the complainant further contests the admissibility of the discretionary assessment carried out in his case with regard to the income from commercial property trading; thus, a reminder had not been issued before the assessment was carried out, so that the discretionary assessment proved to be inadmissible; Contrary to the opinion of the lower court, the reference in the assessment that the objection must contain an application and a statement of reasons with an indication of evidence cannot replace the lack of a reminder before a discretionary assessment is made; contrary to the opinion of the lower courts, the transfer taxes paid in connection with the sale of the property are to be taken into account accordingly when determining the taxable income from the sale of the property; the appellant's appeal is partially upheld, the contested decision of the Appeal Court of the Canton of Basel-Stadt as administrative court of 14. April 2018 is annulled and the matter is referred back to the Tax Appeals Commission of the Canton of Basel-Stadt for a new decision in the sense of the recitals (to make up for the previously omitted review of the income from commercial real estate trading estimated at CHF 800,000 with free cognition). In all other respects, the appeal is dismissed.

Decisions are listed chronologically by publication date.

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