Decisions of the Swiss Federal Court (CW 42 - 2018 )

Overview of the tax rulings of the Swiss Federal Supreme Court published in the week of October 15 - 21, 2018.

Judgment of 21 September 2018 (2C_287/2018), official publication provided: VAT; provisional amount of tax and elimination of the legal proposal; it was disputed and had to be examined whether an objection decision of the FTA, which the FTA issued in application of Art. 86, para. 2 MWSTG, without having previously estimated the provisionally owed tax amount according to professional discretion (Art. 86, para. 2, sentence 2 in conjunction with para. 5 MWSTG), contrary to Art. 86, para. 4 sentence 2 MWSTG; the complainant considered it contrary to convention that an objection decision in the form authoritative in the present case (Art. 86.4 sentence 2 MWSTG) cannot be challenged before any judicial authority independent of administration and in particular complained of a violation of Art. 6.1 of the ECHR; Art. 86.4 MWSTG does not violate Art. 6.1 of the ECHR in the absence of civil law claims and obligations; dismissal of the complainant's appeal.

Judgment of 5 October 2018 (2C_470/2018): Withholding tax reporting procedure; the shareholder of a Swiss AG (X. AG) domiciled in the Caiman Islands sells his shareholding to another Swiss AG (Y. AG) for CHF 3,000,000. One month after this transaction, the X. AG sells its (almost) only asset, a property with a book value of CHF 6,000,000, to a Swiss buyer for CHF 11,500,000. Three years later, X. AG distributes a dividend of CHF 5,000,000 to Y. AG. The notification procedure for the fulfilment of the withholding tax obligation was refused by the FTA on the grounds of tax avoidance. The reason was the assumption of a de facto liquidation at the time of the sale of the property and the fact that there were doubts regarding the refund (E. 6.3.3). The Federal Supreme Court recalls the practice according to which the notification procedure and the restitution are two different procedures and that the claim for restitution is only summarily examined within the framework of the notification procedure. As soon as there is any doubt, the withholding tax must be paid (E. 6.2). The complainant's appeal is dismissed.

Judgment of 5 October 2018 (2C_745/2018): Direct Federal Tax and Cantonal and Municipal Taxes 2001-2004 (Geneva); the appellant's appeal or complaint is dismissed because the reasons he has put forward could already have been asserted in the ordinary tax assessment procedure

Judgment of 28 September 2018 (2C_853/2018): Real estate transfer tax (Solothurn); economic transfer of property between living persons in the case of transfer of 75% of the shares in a real estate company; the appeal proves to be unfounded; dismissal of the appeal, insofar as it is to be upheld.

Non-occurrence decisions / inadmissible complaints: