Overview of the tax law decisions of the Swiss Federal Supreme Court published in the week of 27 August - 2 September 2018.

  • Judgment of 9 August 2018 (2C_302/2018): State and municipal taxes 2011 (Aargau); the taxpayer had worked for many years as a self-employed notary public and was not subject to any bookkeeping or accounting obligations under the commercial law of the time, but voluntarily kept accounts. With the age-related cessation of his notarial work, he declared his income from self-employment in the relevant 2011 tax return (he had previously ceased to work as he believed that this income would be subject to a separate annual tax in the following period together with the other realised hidden reserves). The Federal Supreme Court concludes that the work in progress should be offset and recorded together with the other income earned in the 2011 tax period (the time at which hidden reserves were created is of no further relevance in the circumstances and the argument concerning "old reserves" is also not valid). The appeal is dismissed.
  • Judgment of 10 August 2018 (2C_621/2018): Emission levy; remission; according to Art. 83 lit. m FSCA, an appeal in public law matters regarding the deferment or remission of the levy is inadmissible, unless there is a double condition. Cumulatively, a direct tax decision on income and profit taxes and a legal question of fundamental importance or a particularly important case are required so that tax relief and/or deferral decisions can also be challenged. In the present case, the first condition was not met. If the remission point (main issue) is not appealable, then an incidental issue such as the question of the amount of the interest on remuneration may also not be appealable for reasons of accessoriness and the unity of the proceedings. The admissibility of the appeal depends on the legal relationship at issue in the main proceedings (E. 3.3.3). The appeal by the taxable person is dismissed in so far as it is admissible.
  • Judgment of 10 August 2018 (2C_705/2017): State and Municipal Taxes 2011 (Lucerne); The booking of the gross profit of CHF 4,600,000 resulting from the property purchase agreement of 18 November 2011 in the subsequent period 2012 by the taxpayer who sold two properties proves to be lawful. The purchaser was granted the right to withdraw from the purchase agreement until 23 January 2012. It was disputed whether the right of withdrawal was designed as a suspensive or resolutive condition. Until they occur, both lead to a state of suspense which the tax law must take into account. In practice, a claim subject to a suspensive condition is only deemed to have been realised when the condition is met, whereas a provision or value adjustment must be made under commercial law for a claim subject to a resolute condition until the limbo is resolved (E. 3.3.2). The interpretation of the text of the contract shows that the purchase contract - despite the somewhat unfortunate wording, which is not authoritative due to Art. 18 para. 1 CO - was provided with a suspensive condition, which brought the not yet perfected commitment transaction into existence. From 18 November 2011 to 23 January 2012, a state of suspense prevailed, which must be taken into account for tax purposes. Accordingly, the realisation for tax purposes only occurred in 2012 (E. 3.3.5). The taxpayers' complaint is upheld and the matter is referred back to the assessment authority for re-assessment in accordance with the considerations set out above.
  • Judgment of 2 August 2018 (2C_958/2016): Direct Federal Tax 2008-2012; A change to the balance sheet by the taxable company in the course of the assessment procedure is in principle only permissible if it becomes apparent that certain entries were made in an excusable error regarding the tax consequences. On the other hand, changes to the balance sheet are excluded, with which changes in value are made to offset offsets in the assessment procedure or which are made solely for reasons of tax savings (E. 5.4). The tax authorities must be informed of any changes to previously submitted documents so that they can be traced. The burden of proof that the new annual accounts are based on a transfer of the originally submitted annual accounts that is unobjectionable from a commercial and tax law perspective lies with the taxpayer (E. 5.5.3). In the present case, the latter is not able to present the subsequent change in the balance sheet in a comprehensible manner. The taxpayer's complaint is dismissed in so far as it can be upheld.
  • Judgment of 8 August 2018 (2C_559/2018): Inadmissibility of the appeal; dismissal of the appellant's appeal on the grounds of insufficient statement of grounds in accordance with Art. 106 (2) FSCA. The complaint of arbitrariness within the meaning of Article 9 BV requires the complainant to show the extent to which the application of cantonal procedural law is arbitrary. On the other hand, it is not sufficient to present the facts of the case and interpret cantonal law.
  • Judgment of 8 August 2018 (2C_654/2017): Administrative assistance (DTA Switzerland - Russia); the complainants do not provide any concrete indications in connection with the present request that the presentation of the facts by the requesting state is not predominantly likely to correspond to the facts; no legal question of fundamental importance; the complaint is dismissed.
  • Judgment of 10 August 2018 (2C_644/2018): State and municipal taxes 2013 (Schaffhausen); refusal of the taxpayer's request for a flat-rate deduction on gross rental income totalling CHF 91,200 from the double-family house located outside the canton (in the canton of Zurich). Instead, an effective deduction in the estimated amount of CHF 2,000 was allowed. This on the grounds that the flat-rate deduction is excluded under the law of the Canton of Schaffhausen if the gross rental income exceeds the limit of CHF 90,000. According to the prohibition of intercantonal double taxation, extra-cantonal real estate is subject to the exemption method and the Canton of Schaffhausen may only take into account developed real estate located in the Canton of Zurich in determining the rate. Since the property-related deduction for maintenance, operating and administrative costs is subject to a certain degree of leeway, there is no objection under harmonisation law if one canton makes the flat-rate deduction and the other canton makes the effective deduction in respect of the same property (E. 2.3.3). The taxpayer's complaint is dismissed.
  • Judgment of 10 August 2018 (2C_84/2018): Direct federal tax and state and municipal taxes 2011 and 2012 (Valais); tax remission; assessment at dutiful discretion. The complainants were not able to prove that they had fulfilled their obligations to cooperate or that the assessment was manifestly incorrect. Dismissal of the appellants' appeal.
  • Judgment of 2 August 2018 (2C_819/2017): Administrative assistance (DTA Switzerland - India); in principle, requests based on data of criminal origin may also be complied with as long as the requesting state has not purchased the data in order to subsequently use them for a request for administrative assistance (E.4.); in the opinion of the Federal Supreme Court, the data used for the request for administrative assistance were not purchased for the purpose of a request for administrative assistance, nor is any other disloyal behaviour on the part of the requesting state apparent; the complaint proves to be unfounded overall and is dismissed.
  • Judgment of 6 August 2018 (2C_1043/2016): Administrative assistance (DTA Switzerland - USA); no violation of the right to be heard; no arbitrary determination of the facts; no circumvention of the prohibition of disproportionate search for evidence (fishing expedition); the appeal is dismissed to the extent that it is admissible.
  • Judgment of 6 August 2018 (2C_1044/2016): Administrative assistance (DTA Switzerland - USA); no procedural shortcomings which would result in the invalidity of the final disposition of the FTA and the refusal of administrative assistance; the appeal is dismissed to the extent that it is relevant.

Non-occurrence decisions / inadmissible complaints:

Decisions are listed chronologically by publication date.

‍

Tax topics covered in this post:
No items found.