Overview of the tax law decisions of the Swiss Federal Supreme Court published in the week of 22 - 28 June 2020.

  • Judgement of 20 April 2020 (2C_354/2018) Withholding tax (refund); it is disputed whether the right to use the dividend is a prerequisite for the discharge under Art. 15 para. 1 aAIA CH-EU. In connection with the Parent-Subsidiary Directive, the ECJ has dealt with the right of use and ruled that if the subsidiary and parent company are tax resident in different EU Member States, but the company actually entitled to use the dividend is tax resident outside the EU, the Member States are not obliged to exempt the dividends from withholding tax. The Federal Supreme Court says that it can be assumed that the ECJ's answer to a question under one of the two sets of rules applies equally to the interpretation of the other set of rules. In the present case, the company wished to escape the reservation of abuse under the DBA CH-NL and has transferred its shareholding in the Swiss subsidiary to the Irish-based complainant. This arrangement was not economically motivated, but merely for tax purposes. The characteristics of tax avoidance are met - there is therefore an abuse of rights under international law and under internal law. Utilisation of the advantages under Article 15 para. 1 aAIA CH-EU remains denied. Rejection of the complaint.
  • Judgment of 12 May 2020 (2C_274/2018): Fee for the surveillance of a number with international origination (Berne); the appeal is dismissed in so far as it is admissible ‍
  • Judgment of 8 June 2020 (2C_66/2020): State and municipal taxes 2009-2011 (Geneva); the issue of whether it is possible to deduct taxes on unrealised gains on real estate and to set aside provisions for social security contributions in connection with property tax on buildings forming part of the business assets of the complainants is disputed. The Federal Supreme Court states that deferred taxes, which are in fact purely potential and subject to the condition that the buildings are sold, a sale which may never take place, are not deductible. The lump-sum application for an AHV deduction without further details is not dealt with in detail. Rejection of the appeal. ‍‍‍‍‍
  • Judgment of 8 June 2020 (2C_32/2020): Direct Federal Tax and State and Municipal Taxes 2012 (Valais); It is disputed whether an amount of 5,000,000 euros can be considered a donation and would be tax-exempt under cantonal law. Here, the awareness and willingness of the donor is crucial. The way the Government of Azerbaijan behaved after the complainant left the post of President of the Sports Federation shows that they only gave the money to thank him for the services he had rendered for the development of his sport in Azerbaijan. Dismissal of the complaint.

Inadmissible complaints / decisions not to intervene

Decisions are listed chronologically by publication date.

Tax topics covered in this post:
Withholding Tax
Other Taxes
Wealth Tax
Income Tax