Decisions of the Swiss Federal Supreme Court (CW 40 - 2024)

Overview of the tax rulings of the Swiss Federal Supreme Court published between September 30 and October 6, 2024:

‍Judgmentsof August 30, 2024: 9C_729/2023, 9C_730/2023: State and municipal taxes 2019 (Thurgau); The two judgments are almost identical in terms of facts and timing and differ only with regard to the tax subject. The tax administration rightly did not accept the objection to the discretionary assessment because the objection was not substantiated in due time and was not accompanied by offers of evidence. Furthermore, the discretionary assessment is not null and void as several reminders were sent and the impending discretionary assessment was pointed out. Finally, it is not apparent to what extent the partially incapacitated board member could not have organized himself in such a way that the AG could have fulfilled its procedural obligations. Dismissal of the taxpayer's appeal in the simplified procedure.
Judgment of September 13, 2024 (9C_368/2024): Import duties; dismissal of the manifestly unfounded appeal in the simplified procedure (see also our article of March 24, 2024).
Judgment of August 20, 2024 (9C_541/2023): Direct federal tax 2019 (Zurich); The dispute in this case is whether the profit from the sale of three properties of the taxpayer, which are part of a larger property ensemble, is to be qualified as private capital gains pursuant to Art. 16 para. 3 DBG or as income from self-employment pursuant to Art. 18 para. 2 DBG. In the present case, the Administrative Court assumed commercial real estate trading and based its decision in particular on the debt financing ratio (i.c. 100%) and the connection between A.'s professional activity and the acquisition of the property. In its decision, the lower court stated that A., with his sole proprietorship, provided land registry and neighboring rights services in connection with the transactions of B. AG, from which he purchased the property ensemble. He generated 75% of the turnover of his sole proprietorship with B. AG and had a good relationship with the manager responsible for the sale. Dismissal of the taxpayer's appeal.
Judgment of September 12, 2024 (9C_93/2024): State and municipal taxes (as well as direct federal tax 2007-2021; freezing; Any cantonal court vacations do not apply to appeals against freezing orders regarding claims in connection with direct federal tax, which is why the lower court rightly did not accept the complaints regarding direct federal tax. From a material point of view, it was disputed whether reasons could be put forward for the cantonal and communal taxes that could have led to the revocation of the guarantee. The lower court was of the opinion that no reasons had been put forward that would have justified an appeal. The Federal Supreme Court recognized that cantonal law contains the same provision on tax security as the DBG, meaning that the principles of direct federal tax are applicable despite the lack of a provision in the StHG. Accordingly, in the case of appeals against freezing orders, it was necessary to examine whether there were changed circumstances at the time the appeal was lodged. This examination was not carried out by the lower court. Partial upholding of the appellant's appeal.
Judgment of August 26, 2024 (9C_299/2023): Handänderungssteuer (Bern) 2018; At issue was whether the subsequent exemption from handover tax for real estate used exclusively for residential purposes at the main residence was rightly denied. In this regard, the lower court ruled that the fact that a company is entered in the commercial register with the address of the property in question is sufficient for this property to no longer be considered "personally and exclusively used for residential purposes". It is not relevant whether work is actually carried out at this address. The appellant does not succeed in demonstrating how the lower court violated Art. 5 para. 3 or Art. 8 BV. Dismissal of the taxpayer's appeal.
Judgment of August 26, 2024 (9C_321/2023): Handänderungssteuer (Bern) 2016; At issue was whether the subsequent exemption from handover tax for property used exclusively for residential purposes at the main residence was rightly denied. The cantonal authorities were of the opinion that the rental of two parking spaces on the disputed plot did not constitute exclusive residential use of the property. In particular, it was irrelevant that the rental only generated a small income. In this regard, the Federal Supreme Court considered that the lower court's interpretation of Art. 11b para. 1 HG/BE, according to which any income generated was detrimental to the qualification as "personally and exclusively used for residential purposes", did not prove to be downright arbitrary. Dismissal of the complainants' appeal.
Judgment of August 26, 2024 (9C_322/2023): Handänderungssteuer (Bern) 2016; As above, it was disputed whether the subsequent exemption from handover tax for property used exclusively for residential purposes at the main residence was rightly denied. In the present case, the GmbH was domiciled at the property in dispute. According to the lower court, the domicile of a legal entity argued against the exclusive use of the property for residential purposes, meaning that the tax exemption could not be granted. This interpretation of Art. 11b para. 1 HG/BE was upheld by the Federal Supreme Court. Dismissal of the complainants' appeal.
Judgment of September 11, 2024 (9C_366/2024): Military service tax 2019-2021; The appellant was naturalized in 2018 at the age of 32. As the Federal Supreme Court stated in its judgment 9C_648/2022 of January 9, 2024 (see our article of January 21, 2024), the increase in the age limit in Art. 3 para. 1 WPEG in 2019 does not constitute a violation of the prohibition of retroactivity. The imposition of the levy also does not constitute discrimination within the meaning of Art. 8 and 14 ECHR or Art. 8 BV, especially since the person subject to the levy did not volunteer for voluntary recruitment. The argument that he would not have been drafted for service anyway due to his age did not hold water. Dismissal of the complainant's appeal.