Decisions of the Swiss Federal Supreme Court (CW 43 - 2022)

Overview of tax law decisions of the Swiss Federal Supreme Court published between October 24 - 30, 2022:

Ruling of September 13, 2022 (2C_632/2022): Direct Federal Tax and State and Municipal Taxes 2019 (Thurgau); The taxpayer capitalized its services provided to customers in December 2019 but not invoiced until January 2020 in the account "Work in progress" at acquisition or production cost, deducting the third of the goods. According to the BGer, the fact that in the present case it was a matter of deliveries of standard materials and transport services that could have been invoiced immediately and are therefore to be regarded as having been rendered on the balance sheet date and the consideration as being owed, precludes the accounting treatment applied. The services should have been recognized as prepaid expenses at the full net selling price. The offsetting carried out by the assessment authority with simultaneous adjustment of the tax provision was lawful. Dismissal of the taxpayer's appeal.
Judgment of October 6, 2022 (2C_993/2021): Heavy vehicle fee and application for reimbursement; The dispute in the present case was the reimbursement of the heavy vehicle fee for the period from November 2017 to December 2018 in accordance with the statutory provisions. On January 9, 2019, the competent office informed the complainant that the submitted documents were insufficient as they did not indicate which main route the container had traveled by rail. The authority requested the company to provide it with the documents proving that each container was actually transported by rail before being taken over by the complainant. After a thorough review of the facts, the Federal Supreme Court concludes that the Federal Administrative Court violated the complainant's right to be heard. The Federal Supreme Court therefore remits the case to the Federal Administrative Court so that it orders the acceptance of the evidence requested by the complainant, i.e. orders the complainant to submit a certificate that is suitable to prove the main route by rail of the various containers transported, which are the subject of the claim for reimbursement, and issues a new decision on this basis. The appeal is upheld and the case is referred back to the Federal Administrative Court.
Judgment of 23 September 2022 (2C_192/2022): Import duties; tax period 2020; The lower court considered without arbitrariness that there was a lack of sufficient substance to assume that the place of actual activity was in Büsingen am Hochrhein (DE). Accordingly, it cannot be said with justification that the complainant importer maintains "its business premises" in the Swiss border zone. However, this would be necessary - in addition to other requirements not to be examined here - in order for the importer to be able to benefit from the agricultural cultivation traffic. Dismissal of the importer's appeal.
Judgment of 12 October 2022 (2C_724/2022): Value added tax, tax periods 2012-2016, request for recusal; The taxpayer's appeal against the independently opened negative interim decision regarding the request for recusal is dismissed.
Judgment of September 20, 2022 (2C_940/2021): Staats- und Gemeindesteuern 2018 (Basel-Landschaft); In dispute is whether the property is objectively unrentable and therefore no imputed rental value may be charged. The Federal Supreme Court acknowledged that there is no taxable owner-occupancy if the property is vacant because it cannot be used due to objective external circumstances or because no rental or sale takes place despite corresponding intention and serious efforts. The architect held that the property is not rentable at the present time. Notwithstanding the acknowledged major renovation deficit of the property in dispute, the lower court found that it was objectively usable and charged an imputed rental value. It is untenable that the lower court did not want to take the renovation requirements into account when determining the imputed rental value. Dismissal of the taxpayer's appeal and referral back to the lower court for reassessment.
Judgments of August 31, 2022(2C_502/2021; 2C_503/2021; 2C_504/2021; 2C_505/2021; 2C_506/2021; 2C_507/2021; 2C_508/2021; 2C_509/2021; 2C_510/2021; 2C_511/2021): Withholding tax; additional claims against the shareholders and de facto managing directors of various companies that have since been dissolved in connection with monetary benefits due to the non-recording of income from a bar or brothel business; the withholding tax claims are not time-barred; furthermore, the complaining majority shareholder was unable to prove the arbitrary collection or evaluation of evidence by the lower court. Dismissal of the appeals.
Judgment of 14 October 2022 (2C_804/2021) intended for publication: State and municipal taxes 2015- 2016 (Vaud); The dispute revolves, on the one hand, around the question of whether the cantonal court was correct in assuming that the annual lump sum of CHF 18,000 received by A. in the tax years 2015 and 2016 as compensation for the use of his private vehicle for business trips did not constitute taxable income and, on the other hand, that the costs for the journey between the place of residence and the place of work qualify as deductible travel expenses. Under labor law, the employer is obliged to reimburse the employee for all costs incurred in performing the work. Also, under tax law, only those costs associated with a specific intervention of the employee in the name and on behalf of the employer within the scope of his professional activity are considered reimbursable. If the reimbursement of expenses exceeds the actual expenses incurred by the employee, the excess portion shall be considered taxable (accessory) income pursuant to Art. 17 DBG. However, this does not apply if the lump-sum expense reimbursement is made in application of an expense regulation approved by the tax authority. In such a case, when assessing the employee, the tax authority cannot check the appropriateness of the compensation, but only whether the amount of the expenses paid corresponds to the amount of the lump-sum expenses provided for in the expense regulations. This also applies if the assessment authority is not the one that has accepted the employer's expense regulation. In fact, the approval by the tax authority of the canton in which the employer is domiciled is in principle recognized by all cantons and is binding for them. In the present case, we are dealing with an expense regulation approved by the tax authority of Geneva. Furthermore, the number of kilometers traveled for the necessary journeys between the place of residence and the place of work are deductible according to Art. 26 para. 1 lit. a DBG. The argumentation of the tax authority that the respondent has not proven that he has actually covered the kilometers with his private vehicle which correspond to the lump-sum compensation of CHF 18,000 cannot be accepted. It is not possible to tax the "unused part" of the disputed lump-sum compensation. Dismissal of the appeal of the Vaud Tax Administration.