Overview of tax law decisions of the Swiss Federal Supreme Court published between July 25 - 31, 2022:
- Judgment of December 23, 2021 (2C_398/2021) - intended for publication: State and Municipal Taxes 2019 (Lucerne); The complainant complains that he had his tax residence in the tax year 2019 not in the Canton of Lucerne, but in the Canton of Zug. The present case raises the question of how the principles developed by the Federal Supreme Court for intercantonal tax law affect the determination of domicile for married taxpayers if the taxpayer maintains a joint residence with his spouse, but at the same time maintains relations with his children at another location and also stays overnight at this location with a certain regularity. The Federal Supreme Court has not yet had to assess which family ties weigh more heavily in such a constellation. A preponderance of the relationship to the spouse is to be assumed if the taxpayer no longer needs to care for his or her children or if the care effort is of secondary importance. The complainant's children are of advanced school age or of full age. In addition, the two younger children live with their mother and merely visit the complainant in ZG. His personal and social activities, interests and contacts in ZG are also not able to outweigh the family ties to the spouse. Under these circumstances, the relationship with his new wife is to be given greater weight than that with his children in determining his domicile for tax purposes. Furthermore, the taxpayer claimed that he was to be considered an executive employee and possibly invoked an alternating domicile. The Federal Supreme Court raised the question whether the relationship of alternating residence can be maintained and to what extent the concept can still be applied in harmonized tax law. However, the question could be left open. Dismissal of the appeal of taxpayer A.
- Judgment of July 4, 2022 (2C_345/2022): Direct Federal Tax (2016-2017); The taxable company with its registered office in the Canton of Appenzell Ausserrhoden (AR) and real estate in the Canton of St. Gallen (SG) did not file a tax return despite a reminder in the Canton AR. As a result, it was assessed in the canton of AR at its discretion. This assessment ruling became legally binding. For unexplained reasons, the direct federal tax was also assessed in the canton of SG according to the mandatory discretionary assessment. After a successful appeal in the canton of SG, the assessment there was lower than that in the canton of AR. The taxpayer took this as an opportunity to submit an application for revision in Canton AR. It was disputed and to be examined whether the fact that the Canton SG had arrived at lower tax factors than the Canton AR in the context of the assessment of the direct federal tax constituted a ground for revision. By remaining completely inactive in the assessment in the canton AR, the taxpayer, according to the Federal Supreme Court, fulfills the (revision) ground for exclusion of Art. 147 para. 2 DBG. Dismissal of the taxpayer's appeal.
- Judgment of June 2, 2022 (2C_588/2021): Direct federal tax and state and municipal taxes 2016 (Basel-Stadt); self-employment; disqualification of a permanent establishment in the canton of residence Basel-Land; in 2000, the complainants agreed, subject to "unchanged circumstances until further notice", on a lump-sum tax split for the income from legal practice in the ratio 2/3 (law firm in Basel-Stadt) to 1/3 (place of residence with permanent establishment in Basel-Land). It is not objectionable if, more than 15 years later, the tax administration of Basel-Stadt questions the existence of a permanent establishment at the canton of residence in Basel-Landschaft in the assessment for the tax period 2016. Furthermore, the taxpayer has a duty to cooperate with regard to facts that indicate the existence of a permanent establishment in the canton of Basel-Landschaft, which is less taxed in terms of income tax. Therefore, the burden of proof does not lie with the tax administration of Basel-Stadt if it denies the existence of a permanent establishment in the canton of Basel-Land. Dismissal of the complaint against the Canton of Basel-Stadt. Appeal against the Canton of Basel-Landschaft upheld.
- Judgment of 06 July 2022 (2C_154/2021): Direct Federal Tax and State and Municipal Taxes 2015 (Appenzell Innerrhoden); the subject matter of the dispute in the Federal Court proceedings is the tax treatment of four additions to the complainant's assets, namely (i) put option premium of CHF 12.5 million, (ii) a compensation payment, (iii) a payment pursuant to the gift agreement and (iv) a second put option premium of CHF 11.1 million. The two lock and put option agreements of July 2015 and November 2015, respectively, impose two obligations on each of the contracting parties. The complainant waives his right to sell shares of C. AG and undertakes to take over shares of the same number at a predefined exercise price upon exercise of the put option E. or to pay a compensation payment in the amount of the value of the put options. The lower court thus correctly concluded that the put option premiums constitute taxable income and are not a tax-neutral reallocation. Whether the payments are taxable income according to Art. 23 lit. d DBG or only covered by the income general clause can remain open. The compensation payment also qualifies as taxable income. Moreover, the alleged gift is a compensation payment for the early departure of F and not a gift. Dismissal of the appeal of taxpayer A.
- Judgment of 14 July 2022 (2C_761/2021): Cantonal and communal taxes and direct federal tax (Valais); the lower court violated the taxpayer's right to be heard in several respects; the taxpayer's appeal is upheld and the case is referred back to the lower court.
- Judgment of June 24, 2022 (2C_838/2022): State and municipal taxes and direct federal tax 2017 (Thurgau); free administration of justice and discretionary surcharge; the tax administration applied a discretionary surcharge to the taxpayer due to the under-declared income. Since the taxpayer was already unable to provide evidence in the objection proceedings that the undeclared income was tax-exempt casino winnings, the lower court was right to deny him free administration of justice on the grounds of hopelessness. Dismissal of the taxpayer's appeal.
- Judgment of 23 June 2022 (2C_734/2021): State and municipal taxes 2012 (Aargau); Deduction of property maintenance costs; The lower court rightly decided that the disputed costs for construction work on a newly acquired property are value-enhancing expenses. In doing so, it correctly not only included the relationship between the costs of the construction work and the purchase price in its considerations, but also explained in detail why the individual "renovation works" are value-enhancing expenses. Furthermore, there is no unjustified unequal treatment pursuant to Art. 8 para. 1 of the Federal Constitution, since even minor maintenance work carried out on an ongoing basis cannot be claimed as property maintenance costs if they have a value-enhancing character. Finally, there is also no violation of Art. 127 paras. 2 and 3 BV, since the value-enhancing expenses are investment costs. This term is defined under tax harmonization law and therefore the costs qualified as value-enhancing expenses in the present case are in principle also investment costs. Dismissal of the taxpayer's appeal.
Non-occurrence:
Decisions are listed chronologically by publication date.
