Decisions of the Swiss Federal Supreme CourtCW 44 - 2025)

Overview of the tax rulings of the Swiss Federal Supreme Court published between October 27 and November 2, 2025:

Judgment of September 27, 2025 (9C_113/2025) - for publication: Inheritance tax 2022 (Lucerne); The question to be clarified was whether the complainant was rightly classified as a non-relative (tax rate with progression surcharge: 40 %) or whether he should be regarded as belonging to the parental line (tax rate with progression surcharge: 12 %). The childless testator appointed the complainant as heir alongside three co-heirs with a quota of 50%. The complainant (born in 1963) claimed that he was the son of the testator's brother. As the alleged father was a Catholic priest, the paternity had been concealed and the complainant had been placed with a foster family after his birth. An action for paternity filed after the inheritance had been accepted was dismissed because the deadline had expired. Due to the lack of a relationship under civil law, the lower courts denied that the complainant belonged to the parental line. With regard to the basic facts of the cantonal provision in § 3 para. 1 EstG/LU, the Federal Supreme Court confirmed this conclusion. However, it pointed out that the alternative facts pursuant to § 3 para. 2 EstG/LU, according to which the basic facts also apply to illegitimate blood relatives, had not been examined at all in the previous proceedings. The appeal was upheld and referred back to the local authority for reassessment.
Judgment of September 16, 2025 (9C_397/2024): Direct federal tax and state and municipal taxes 2020 (Bern); at issue in this case is the amount of the imputed rental value of a property located in France. In his tax return, the complainant declared the "valeur locative cadastrale" determined for a communal property tax in France. In deviation from this, the tax administration calculated the imputed rental value based on the purchase price of the property. The Federal Supreme Court considered that the lower court had not arbitrarily decided that it had not been established that the "valeur locative cadastrale" corresponded to domestic valuation principles. In particular, the large difference between the two values casts doubt on this. Dismissal of the taxpayer's appeal.
Judgment of September 24, 2025 (9C_223/2025): State and municipal taxes 2019-2020 (Zurich); in this case, the place of actual administration of A AG is disputed. This company has its registered office in the canton of Schwyz. In a tax domicile decision, the tax administration of the Canton of Zurich determined the place of effective management in a municipality in the Canton of Zurich. The lower court justified the allocation of the place of effective management to the canton of Zurich on the grounds that three of the four authorized signatories were resident in the canton of Zurich, that the domicile address of A AG was a mere mailbox domicile and that due to the lack of involvement of A AG, hardly any indications were found that the place of effective management was in the canton of Schwyz. In addition, an operationally active sister company had its registered office in Zurich, where the Chairman of the Board of Directors, the CEO and a member of the Management Board presumably also worked. In the opinion of the Federal Supreme Court, the lower court did not make an arbitrary decision. The assessment rulings of the Canton of Schwyz for 2020 and 2021 must be revoked in accordance with the intercantonal ban on double taxation and the tax refunded. Dismissal of the taxpayer's appeal against the Canton of Zurich. Appeal of the taxpayers against the Canton of Schwyz upheld.
Judgment of October 1, 2025 (9C_286/2024): Direct federal tax as well as state and municipal taxes 2021 (Geneva); At issue was the deductibility of maintenance payments in the amount of CHF 84,324, which were made to the divorced wife and the joint children. The payments were transferred to a joint bank account because, according to the obligor, the wife was unable to open her own bank account in Spain - her new place of residence. With reference to the Federal Supreme Court ruling 2C_380/2020 of November 19, 2020 and the congruence principle, the lower courts refused to allow the deductibility of the maintenance payments as there had been no outflow of assets from the obligor. The Federal Supreme Court confirmed this consequence. Dismissal of the obligor's appeal.
Judgment of October 1, 2025 (9C_47/2025): Value added tax 2014 to 2017; obligation to pay pursuant to Art. 12 VStrR. At issue in the present case were various set-offs that the FTA had made after conducting administrative criminal proceedings and which were confirmed by judgment of the FAC A-2909/2023 of December 11, 2024 (see our article of January 5, 2025). The FSC first states that the FAC rightly limited the subject matter of the dispute and correctly determined the scope of the additional tax claim still in dispute. The FSC then comes to the conclusion that some of the taxpayer's complaints cannot be accepted because the taxpayer is not adversely affected in this respect. The other complaints had either been insufficiently substantiated by the taxpayer, or they were obviously unfounded or even partly pointless. Furthermore, the BGer states that the limitation period for the obligation to perform in the present case is governed by Art. 105 para. 3 let. a in conjunction with Art. 42 MWSTG. Art. 42 MWSTG. The relative limitation period for assessment had not occurred. With regard to the 2014 tax period, the absolute limitation period for assessment did indeed expire on January 1, 2025. However, in the opinion of the FSC (partly contrary to the taxpayer's view), the corresponding additional tax claim was not the subject of the dispute. Dismissal of the taxpayer's appeal.
Judgment of October 1, 2025 (9C_48/2025): Value added tax 2012 to 2016; obligation to pay pursuant to Art. 12 VStrR. At issue in the present case were numerous set-offs that the FTA had carried out after conducting administrative criminal proceedings and which were largely confirmed by the judgment of the FAC A-688/2023 of December 11, 2024, insofar as the absolute limitation period for assessment had not already expired with regard to the additional tax claim still in dispute. The FSC first states that the FAC rightly limited the subject matter of the dispute and correctly determined the scope of the additional tax claim still in dispute. The FSC then came to the conclusion that some of the taxpayer's complaints could not be accepted because the taxpayer was not adversely affected in this respect. The other complaints were either inadequately substantiated by the taxpayer, or they were clearly unfounded or in some cases even pointless. Furthermore, the BGer states that the limitation period for the obligation to perform in the present case is governed by Art. 105 para. 3 let. a in conjunction with Art. 42 MWSTG. Art. 42 MWSTG, even though the criminal proceedings had not yet been concluded, as the FTA had not recognized a qualified offence within the meaning of Art. 105 para. 3 let. b MWSTG in its penalty order. The relative statute of limitations for assessment had not occurred. On the other hand, the absolute statute of limitations for assessment had occurred with regard to the 2014 tax period, meaning that the taxpayer was able to assert itself to the extent of the additional tax claim still in dispute in this regard. Partial approval of the taxpayer's appeal.
Judgment of October 1, 2025 (9C_49/2025): Value added tax (2013 to 2017); obligation to pay pursuant to Art. 12 VStrR. In dispute in the present case were some offsets that the FTA had made after administrative criminal proceedings had been conducted and which were confirmed by judgment of the FAC A-2907/2023 of December 11, 2024. The FSC first states that the FAC rightly limited the subject matter of the dispute and correctly determined the scope of the additional tax claim still in dispute. The FSC then came to the conclusion that some of the taxpayer's complaints could not be upheld because the taxpayer was not adversely affected in this respect. The other complaints were either inadequately substantiated by the taxpayer, or they were clearly unfounded or in some cases even pointless. Furthermore, the BGer states that the limitation period for the obligation to perform in the present case is governed by Art. 105 para. 3 let. a in conjunction with Art. 42 MWSTG. Art. 42 MWSTG. The relative limitation period for assessment had not occurred. On the other hand, the absolute limitation period for assessment had expired with regard to the 2014 tax period, meaning that the taxpayer was able to assert the scope of the additional tax claim still in dispute in this regard. As this was only a marginal additional tax claim, the FSC nevertheless ordered the taxpayer to pay the court costs in full. Partial approval of the taxpayer's appeal.
Judgment of October 1, 2025 (9C_50/2025): Value added tax (2015 to 2016); obligation to pay pursuant to Art. 12 VStrR. At issue in this case were numerous offsets that the FTA had carried out after conducting administrative criminal proceedings and which were largely confirmed in the ruling of the FAC A-3394/2023 of December 11, 2024. The FAC concluded that some of the taxpayer's complaints could not be upheld because the taxpayer was not adversely affected in this respect. The other complaints were either insufficiently substantiated by the taxpayer, or they were manifestly unfounded or even partly pointless. Furthermore, the BGer states that the limitation period for the obligation to perform in the present case is governed by Art. 105 para. 3 let. a in conjunction with Art. 42 MWSTG. Art. 42 MWSTG and that neither the relative nor the absolute statute of limitations for assessment had occurred. Dismissal of the taxpayer's appeal.
Judgment of October 1, 2025 (9C_233/2025): Direct federal tax as well as state and municipal taxes 2020 (Geneva); At issue was the question of whether the contribution of 30% of the shares of an AG to the 100% self-owned GmbH was rightly qualified as a transposition. The complainant acquired the AG in dispute in 2017 for CHF 2.6 million, with 30% of the shares initially being transferred. The remaining 70% were to follow in 2021. In 2020, the complainant concluded an addendum to the share purchase agreement from 2017 with the seller. This provided for the seller to accept the transfer of the shares already transferred and the remaining 70% stake to a holding company to be founded by the complainant. This was implemented in 2020 with regard to the 30%. The Geneva tax administration qualified this process as a transposition and, following an objection that was raised and partially upheld, set the income from the transposition at CHF 750,000. The appellant couple complained to the Federal Supreme Court that the facts had been arbitrarily established. This was because a change of party had been agreed with the addendum to the purchase agreement, meaning that the disputed shares were never attributable to the complainant's private assets. The Federal Supreme Court dismissed the arbitrary complaint and confirmed the existence of a transposition, in particular also based on the tax returns submitted by 2020, in which the shares were listed in the securities register. Dismissal of the appeal by the liable parties.