Overview of the tax law decisions of the Swiss Federal Supreme Court published in the week from 31 August - 6 September 2020.

  • Judgment of 23 July 2020 (2C_426/2020): Customs; proof of origin; dispute as to whether duty-free treatment under the Free Trade Agreement is to be denied and customs and other import duties are to be recovered accordingly if the customs authorities of the exporting state conclude in the course of a verification procedure that the conditions for duty-free preferential treatment are not met. The Federal Court affirms this and states that the authorities of the importing State are bound by the result of that verification by the exporting State and that they are not required to determine the origin of the goods in dispute themselves. Dismissal of the taxpayers' complaint (see our article of 7 June 2020).
  • Judgment of 17 August 2020 (2C_576/2020): Direct federal tax 2016 (Thurgau); genuine restructuring success. The tax administration had offset a debt waiver (not recognised in profit or loss) by the shareholder, whereupon the taxpayer submitted a new tax return without debt waiver. Balance sheet changes are excluded, which are used to make value changes to offset offsets in the assessment procedure, or which are only made for tax savings reasons. If the tax consequences of the debt waiver are not recognized, this does not constitute an "excusable error" since it is not based on the facts of the case. Rejection of the taxpayers' complaint.
  • Judgment of 21 August 2020 (2C_190/2020): Inheritance tax (Geneva); the dispute concerns the testator's last place of residence and therefore the inheritance tax liability. The taxable heirs claimed that the deceased's residence at the time of his death was in Madrid and his residence in Geneva was merely fictitious. The concept of residence had been misapplied in Geneva. The Federal Supreme Court is examining this complaint only for arbitrariness. The complainants cannot prove why the result of the general weighing of evidence is untenable for the establishment of residence in Geneva. The fact that the Spanish authorities also levy an inheritance tax in the absence of a double taxation agreement in the area of inheritance tax does not change this. Dismissal of the appeal by the taxable heirs.
  • Judgment of 25 August 2020 (2C_326/2020): Direct Federal Tax and State and Municipal Taxes 2015 (Geneva); Acknowledgement of a deficiently opened assessment notice triggers a 30-day period for appeal despite defectiveness; as the defectiveness could have already been asserted in the ordinary procedure, the appeal is excluded; dismissal of the taxpayers' complaint.
  • Judgement of 6 August 2020 (2C_295/2020): Direct federal tax and state and municipal taxes 2014 and 2015 (Zurich); offsetting of simulated loans; the taxpayer had debts to his mother; the mother subscribed to bearer shares in the context of a capital increase of the taxpayer's public limited company and paid these by (non-cash) contribution of her claims in the form of bearer debentures, all at the expense of the taxpayer. In contrast to the partial payment, the AG was able to dispose of the loan claim against the taxpayer after the contribution in kind and received an asset; by waiving this asset, the AG has an outflow of funds and the taxpayer has an inflow of funds (taxable investment income); dismissal of the taxpayer's appeal
  • Judgment of 27 August 2020 (2C_866/2019): Wealth tax; valuation of unlisted shares in 2008 (Geneva); the present case concerns the wealth tax value of shares in a law firm. The complainants complained that the Geneva tax office had chosen the wrong valuation method. The Federal Supreme Court is examining such a complaint only on the basis of arbitrariness, as the cantons have a wide margin of manoeuvre in this matter. Rejection of the taxpayers' complaint.
  • Judgement of 27 August 2020 (2C_1037/2019): Administrative assistance DTA Switzerland-Sweden; the letters from the Swedish tax authority, according to which the tax audit was concluded without set-offs, do not eliminate the current interest of the FTA in challenging the decision of the lower court. The wording "held by" in the request for administrative assistance in question refers not only to accounts held directly but also indirectly. Indirectly held accounts are accounts which are not in the name of a person but in respect of which the person in question has economic power of disposal because he is the beneficial owner or has a corresponding power of attorney. The persons concerned are not entitled to demand blackening of the names of third parties mentioned in the relevant bank documents. Approval of the appeal by the FTA (see also our article of 8 December 2019).

Non-entry decisions:

Decisions are listed chronologically by publication date.

Tax topics covered in this post:
Custom Duties
Inheritance Tax
Profit Tax
Treaties
International Tax
Income Tax
Wealth Tax