Overview of the tax law decisions of the Swiss Federal Supreme Court published in the week of 30 July - 5 August 2018.

  • Judgment of 5 July 2018 (2C_140/2018): (2006 - 2007); the principle of legality is not violated if the Federal Council, based on Art. 47 para. 1 WPEG, determines the applicable conversion rate in Art. 20 WPEV, because no new rights and obligations are created which would require a special formal-legal basis; furthermore, the principle of equality of rights is not violated in terms of content if Art. Section 20 WPEV stipulates that the foreign currency is to be converted in accordance with the situation as it existed at the time of the statutory tax claim. Dismissal of the complaint of the person liable for damages.
  • Judgment of 13 July 2018 (2C_489/2018 / 2C_490/2018): Direct Federal Tax and State and Municipal Tax 2007 (Appenzell Ausserrhoden); the complainants are not able to substantiate in a substantiated manner to what extent the offsets in the tax period 2007 were wrongly made; in deviation from the usual rules on the burden of proof, a Shareholder who is also an organ of the Company must dispute in detail the existence and amount of the monetary benefit claimed by the assessment authority. If he fails to do so, or if he limits himself to general statements, the assessment authority may assume that the offsetting, which has been legally assessed at company level, is equally entitled to the unitholder (E. 2.2.5). Dismissal of the two complaints by the taxpayers, in so far as they can be substantiated.
  • Judgment of 16 July 2018 (2C_546/2017): Direct federal tax 2010 (place of assessment); divorce of a couple domiciled in Canton ZH in the course of 2009; unlimited tax liability of the husband (hereinafter "taxpayer") in Canton ZG for the whole of 2009 While the taxpayer claims to have lived in Canton ZG with his brother and sister-in-law, Canton ZH again claims the taxpayer's unlimited tax liability in 2010 due to the repurchase of the family house in ZH belonging to the ex-wife. In the present case, the burden of proof with regard to the taxpayer's subjective tax liability lies on the side of the Zurich tax authorities, because the taxpayer is already subject to unlimited tax liability in the canton ZG in 2010. In this context, the authority must accept the evidence offered by the taxpayer, in particular the questioning of the ex-wife and her new partner, who can testify that the taxpayer did not live with them (which would also completely contradict general life experience). The fact that mainly purchase receipts from the canton ZH are available cannot be decisive on its own (E. 2.6).
  • Judgment of 3 July 2018 (2C_109/2017): Regulation on Parking Fees (Lucerne); remission examination; the appellant contests Article 1(1) al. 4 of the Regulation in question This provides that operators of private parking spaces subject to the regulations must charge users a fee. The investments mentioned in the regulations are not subject to the obligation to charge fees by law, but rather on the basis of a subordination order in individual cases. In the context of the abstract review of a statute, it emerges that the contested provision is formulated in a highly indeterminate manner and, in addition, the objectives of the obligation to levy fees are unclear or in some cases even legally questionable. The lack of clear objectives and purposes makes it impossible from the outset to review the public interest and the proportionality of a possible subordination order in individual cases in terms of Art. 36 (2) and (3) BV in court. Nor can this shortcoming be remedied by an interpretation of the contested provision in conformity with the constitution. The complaint is upheld.
  • Judgment of 17 July 2018 (2C_648/2017) Administrative assistance (DTA Switzerland - India); The mere use of illegally acquired data by the requesting state does not constitute disloyal behaviour; rather, all the specific circumstances of the individual case must be taken into account; it does not follow from BGE 143 II 224 that disloyal behaviour can only be present if explicit assurances given beforehand have been disregarded; Accordingly, at least the purchase of illegally acquired data and a subsequent request for administrative assistance based on this constitutes a breach of good faith even if the requesting state has not expressly assured in advance that it will refrain from such conduct; unlike France in BGE 143 II 224, India has not made an explicit declaration in this case that the request is not based on data from criminal offences under Swiss law; para. 10 bars. b of the Protocol to the DBA CH-IN does not require the requesting State to provide information on the origin of the data forming the basis of the request; nor does the DBA CH-IN contain an obligation for the requesting State to give an assurance that its request will not be based on information obtained through criminal offences under Swiss law; the good faith of a State is required in international relations; in connection with administrative assistance in tax matters, this means that there is in principle no reason to doubt the accuracy of and compliance with the presentation of facts and statements made by other States; in this context, it is not to be regarded as a breach of good faith on the part of the requesting State if it does not give such an explicit assurance despite being requested to do so by the FTA; rejection of the complainants' complaint
  • Judgment of 17 July 2018 (2C_217/2018): State and municipal taxes 2011 (Aargau); cessation of self-employment as a farmer; sale of parcels of land (building land); protection of agricultural land rights; the legal nature of the parcels of land concerned was disputed, because if they fulfilled the conditions imposed on land of an agricultural and/or forestry nature, the capital gain would only be attributed to taxable income up to the amount of the investment costs. In contrast, the economic or industrial added value would be subject to the cantonal real estate gains tax. If, on the other hand, the assets are not agricultural or forestry business assets (as assumed by the previous instance), the increase in value must be recorded with income tax in addition to the reintroduced depreciation. The appeal is dismissed.

Non-occurrence decisions / inadmissible complaints:

Decisions are listed chronologically by publication date.

Tax topics covered in this post:
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