Decisions of the Swiss Federal Court (CW 31/32 - 2020 )

Overview of the tax law decisions of the Swiss Federal Supreme Court published in the weeks from 27 July - 9 August 2020.

Sentence of 18. June 2020 (2C_247/2020): State and Municipal Taxes 2011 (Aargau); In the present case, a farmer gave up his self-employment and re-parceled the agricultural land belonging to him; The appellant claimed in particular that the liquidation gain due to invalidity should be taxed with a separate annual tax; For this he submitted medical certificates which the lower instance considered insufficient; The latter did not undertake any further investigations and thus violated the right to be heard; Dismissal of the appeal to the lower instance.
Judgement of 25 June 2020 (2C_385/2020): State and municipal taxes 2014-2018 (Aargau); tax exemption due to non-profit status; starting point are two loans in the balance sheet of a foundation; loan 1 to a public limited company, whereby the chairman of the foundation board is also the delegate of the board of directors of this public limited company; loan 2 to a member of the foundation board; the requirement of altruism is disputed; in the present case, the investment of the foundation assets in the form of loans or The position of the borrowers together with the amount of the loans in the balance sheet total (> 50%), on the other hand, gives the objective appearance of a conflict of interests of the members of the Board of Trustees; unselfishness and thus non-profit status is therefore not given; dismissal of the complaint of the Foundation.
Judgment of 1. July 2020 (2C_392/2020): State and Municipal Taxes 2010 (Aargau); The subject of the dispute was originally whether real estate belonged to private or business assets; The assessment authority made a reclassification into business assets in 2010 and nevertheless made the lump sum deduction on the grounds that the taxpayers could not have made any arrangements due to the lack of a transitional period; This approach has no basis in harmonised tax law; the lower courts found that taxpayers had filed a request which neither reduced nor increased the tax base and therefore did not have a legally protected interest and, consequently, correctly issued a decision of non-admission; dismissal of the taxpayers' complaint.
Judgment of 7 July 2020 (2C_750/2019): Direct federal tax and state and local taxes 2011-2012 (St. It is disputed to what extent a hidden profit distribution exists. The ruling of the lower court shows that various offsets were made in the case of the GmbH held by the deceased parents, since the aircraft and a towing vehicle were used exclusively for private purposes despite being entered in the company's books; However, this does not yet justify an automatic offsetting mechanism for income tax purposes; It is not certain whether the aircraft was owned by the GmbH or by a person close to the GmbH; The question of ownership is a legally relevant fact; Approval of the appeal and rejection to the lower instance.
Sentence of 22. June 2020 (2C_465/2020): VAT 2010-2014 (deduction of input tax); the dispute is whether the taxpayer has made a legally valid option for the rental of the residential building so that he can claim the deduction of input tax; according to the law applicable at the time, an "open statement" of the tax is indispensable for the recognition of the option, namely the existence and amount of the tax must be shown; A distinction must be made between the mere declaration in the form of the declaration in the VAT statement; The previous instance recognised that, although certain indications could be found in the accounts indicating that the taxable person had actually declared rental income and had also paid VAT on it, this did not constitute a valid legal option; dismissal of the complaint.
Judgment of 15 July 2020 (2C_133/2020): Direct federal, state and municipal taxes 2006-2010 (Geneva); In the present case, taxpayers in 2013 subsequently filed a voluntary declaration that they had acquired a property in France in July 2009; Similarly, they did not declare dividends received; The tax authorities had been in possession of information from third parties since 2012 with regard to the French property and the shareholdings in company C. AG; The spontaneity required for a self-denunciation without penalty is not given if the denunciation is made while the tax authorities are already investigating; Dismissal of the taxpayers' complaint
Judgment of 26 June 2020 (2C_1055/2019): Real estate gains tax 2015 (Lucerne); As a member of a community of heirs, the complainant took over from the same community three plots of land subject to farming land law with a total investment cost value of CHF 109,242.- at a takeover price of CHF 580,000.At the same time, the properties were transferred from the business assets of the community of heirs to the private assets of the complainant at a transfer value of CHF 109,242; subsequently, the local authority deferred the property gains tax owed by the community of heirs; later, the complainant transferred the properties from private to business assets at a transfer value of CHF 580,000.- from private to business assets, which caused the municipality to assess a property gain of CHF 470,758.- to the account of the complainant. of the complainant; it was disputed whether, in the context of the acquisition, the land was initially transferred to the private assets and only then to the business assets or directly to the business assets of the complainant; insofar as a plot of land serves the purpose of independent gainful activity, it belongs to the business assets - despite contrary accounting and contrary opinion of the taxpayers; the complainant took over the land as a self-manager, which is why it was transferred directly to the business assets upon acquisition and there was no tax system realisation; the complaint of the taxpayers was upheld.
Ruling of 7 July 2020 (2C_379/2020): Direct Federal Tax and State and Municipal Taxes 2017 (Lucerne); The taxpayer worked in an executive position for two companies, both belonging to the same group of companies; From a Liechtenstein foundation, which is close to the entrepreneurial family behind this group, the taxpayer received a benefit of CHF 100,000 in 2016; As a gift, this was not taken into account for income tax purposes; In 2017, a further benefit of CHF 50,000 followed.This was included in the calculation of the taxable income for 2017 - with reference to an error in the tax calculation for 2016; in the present case, there is an economic connection between the benefit and the employment relationship, which justifies an addition to the taxable income; dismissal of the taxpayer's appeal.
Judgment of 8 July 2020 (2C_275/2020): Non-remunerated litigation (restitution; Grisons); the taxpayers' appeal is upheld and rejected by the lower court.
Judgment of 6. July 2020 (2C_303/2020): Intercantonal tax law 2009 (tax sovereignty); The cantonal tax sovereignty for the tax period 2009 is in dispute; The lower instance found that the premises rented in the canton of Zug have a toilet and a washbasin, but no shower and no cooking facilities; In addition, the senior executive also moved the registered office of his company there; There is a lack of an essential residential infrastructure here that would enable him to stay permanently, so he did not move his main tax domicile from Zurich to Zug; Dismissal of the taxpayer's appeal.
Judgment of 13 July 2020 (2C_425/2020): Real estate gains tax of the Canton of Zurich (2006-2012); The discretionary assessment was admissible in the present case, since the taxpayer, despite reminders, only submitted one tax return for the 15 properties which were successively sold to third parties; His objection that one single tax return was sufficient in full is incorrect; The estimates of the value-enhancing expenses based on the estimates of the building insurance companies were not arbitrary; rejection of the taxpayer's complaint.
Judgment of 8. July 2020 (2C_155/2020): State and communal taxes 2012 (Aargau); State and communal taxes 2012 (Aargau); In the present case, the Federal Supreme Court had to examine whether the gains from the sale of the real estate concerned should be recorded with income tax or with real estate gains tax; If the real estate concerned is protected by the Federal Law on Rural Land Law, the gain from the sale is (also) to be allocated to taxable income at cantonal and communal level only up to the amount of the investment costs; By contrast, the economic value added is subject to cantonal real estate gains tax; if, on the other hand, it is "ordinary", i.e. not agricultural and/or forestry business assets, then in addition to the reintroduced depreciation, the realised capital gain must also be recorded with cantonal and communal income tax; the Federal Supreme Court concludes that the properties concerned are building land parcels that are no longer protected by land law; tax privileges are thus excluded. The taxpayer's appeal is dismissed.
Judgment of 9. July 2020 (2C_476/2020): State and municipal taxes; direct federal tax (Lucerne); The complainant's request that the present case be judged by (extraordinary) members of the court with a "communist-social-Christian-green-human basic attitude" cannot be granted; With regard to the main appeal, the Federal Supreme Court then concludes that the conditions for the exemption of the association from the subjective tax liability (due to the pursuit of a public or charitable purpose) are not fulfilled and refers to the detailed reasoning of the lower instance; dismissal of the taxpayer's appeal.
Judgment of 15 July 2020 (2C_278/2020): State and municipal taxes; direct federal tax 2009 (Bern); question of the act by the taxpayer interrupting the limitation period; unlike contract law, direct tax does not suffice for any conduct that may be interpreted in good faith as confirmation of the debtor's obligation. Under direct tax law, explicit acknowledgement of debt is required, which presupposes that the taxpayer is of the opinion that the existence and amount of the tax claim would be recognised by the conduct he has expressed. If the behaviour expressed clearly expresses that the taxpayer is also of the opinion that there is an obligation to pay, their declaration of intent must be considered an "express recognition of the tax claim" within the meaning of Art. 120 (3) lit. b DBG. If, however, the taxpayer merely expresses that in the opinion of the assessment or reference authority there is an obligation to perform, a declaration of knowledge but not of intent is present, which is why the relative limitation period cannot start anew. Accordingly, the respective reporting of the presumed tax liability for 2009 was not interrupting the period of limitation in the tax returns of subsequent periods in the event of losing the tax dispute in question. Approval of the taxpayers' complaint.
Judgment of 22 July 2020 (2C_1050/2020): Tax exemption due to public purpose (Geneva); an overall assessment of the private school run by the complainant in the light of the criteria in the KS SSK of 18 January 2008, tax exemption of legal persons pursuing public or charitable or cult purposes, shows that the complainant does not pursue a public purpose. Since in the present case it was only disputed whether the complainant could be exempted from tax on profits by 50% or in full, it is not necessary to examine whether a partial exemption is justified. Dismissal of the taxpayers' complaint.
Judgment of 21 July 2020 (2C_983/2019): Non-remunerated administration of justice; the taxpayer's appeal is upheld and the case is referred back to the lower court.
Judgment of 10 July 2020 (2C_566/2020): Direkte Bundessteuer 2015-2017 (Zurich); The lower instance was able to assume, in a constitutionally tenable manner, that the illness had not reached a degree that could have prevented the taxpayer from either taking action himself or at least designating a representative; The request for the restoration of the deadline was therefore rightly rejected; dismissal of the taxpayer's appeal.

Inadmissible complaints / decisions not to intervene / administrative assistance:

Judgment of 16 June 2020 (2F_6/2020): VAT (1st quarter 2010 to 4th quarter 2011); the application for re-establishment of the time limit for submitting the power of attorney is rejected.
Judgment of 21 July 2020 (2C_569/2020): Withholding tax (Geneva); the appeal is dismissed.
Judgment of 23 July 2020 (2C_605/2020): Cantonal and municipal taxes; direct federal tax 2019 (Valais); the appeal is not upheld.
Judgment of 13 July 2020 (2C_252/2020): Administrative assistance DBA CH-USA; the appeal by the FTA is dismissed.
Judgment of 13 July 2020 (2C_253/2020): Administrative assistance DBA CH-USA; the appeal by the FTA is dismissed.
Judgment of 13 July 2020 (2C_287/2019, 2C_288/2019): Administrative assistance DBA CH-Spain; the appeal by the FTA is dismissed.
Judgment of 13 July 2020 (2C_325/2020): Administrative assistance DBA CH-USA; the appeal by the FTA is dismissed.
Judgment of 13 July 2020 (2C_376/2019), official publication scheduled: Administrative assistance DTA CH-Spain; It is questionable whether the FTA was obliged to inform the Brazilian companies of the administrative assistance proceedings that had been initiated, since their names are listed as a party in the contracts with the Swiss company to be transmitted; The Federal Administrative Court had affirmed this and therefore annulled the final ruling without responding to the information owner's appeal; It is clear that the Brazilian companies are not among the persons concerned; In the present case, Art. 14 para. 2 StAhiG (information of further persons entitled to lodge complaints) is relevant in the present case and must therefore be interpreted in order to determine the personal scope of application; In the case of a third party, an interest in rescission in the context of administrative assistance, which presupposes the right to lodge a complaint, exists only in very special situations; the mere fact that names of third parties are mentioned in the documents to be transmitted is not sufficient to establish an interest worthy of protection; Similarly, the fact that the third party claims, albeit rightly, that his name is unlikely to constitute relevant information is not sufficient to establish an interest worthy of protection; Persons whose capacity to appeal is not apparent from the files and who are therefore not notified may also request that their names be blackened; Approval of the appeal by the FTA and referral to the Federal Administrative Court for treatment in accordance with the considerations.
Judgment of 13 July 2020 (2C_537/2019), official publication scheduled: Administrative assistance DBA CH-USA; the order of the lower instance (Federal Administrative Court) correctly applied the speciality principle when it obliged the FTA to inform the IRS that the information may only be used in proceedings against the person liable to tax in the USA, who is affected by the request, as the beneficial owner for the facts mentioned in the request, and that the information must be kept secret; the speciality principle has not only a factual but also a personal dimension; If the requesting State were allowed to use the information transmitted vis-à-vis third parties, there would be spontaneous administrative assistance, to which the States Parties have not committed themselves; The lower instance ordered the blackening of the names of the officials; the names of their superiors had already been blackened by the FTA; This procedure by the FTA constitutes a violation of the principle of equal treatment and the prohibition of arbitrariness. The IRS stated that it was necessary (which is to be interpreted in analogy to "probably significant") for this investigation to establish the identity of those persons who have signatory powers or information rights over the account in question; this does not include the clerks; the IRS did not even consider the names of their superiors to be necessary; dismissal of the FTA's complaint
Judgment of 13 July 2020 (2C_538/2019, 2C_539/2019): Administrative assistance DBA CH-USA. Dismissal of the complaints of the FTA.
Judgment of 13 July 2020 (2C_540/2019): Administrative assistance DBA CH-USA. Dismissal of the appeal of the FTA.
Judgment of 13 July 2020 (2C_545/2019): Administrative assistance DBA CH-South Korea; at the same time, instruction of the FTA to inform the requesting authority regarding the reservation of speciality; dismissal of the FTA's appeal.
Judgment of 13 July 2020 (2C_687/2019): Administrative assistance DBA CH-Sweden; approval of the FTA's complaint concerning blackening; at the same time, instruction by the FTA to inform the requesting authority concerning the reservation of speciality.
Judgment of 13 July 2020 (2C_820/2019): Administrative assistance DBA CH-USA. Dismissal of the appeal of the FTA.