Overview of the tax rulings of the Swiss Federal Supreme Court published between November 4 - 10, 2024:
- Judgment of October 3, 2024 (9C_635/2023) intended for publication: Withholding tax 2015; at issue in this case is the entitlement to a refund of withholding tax paid by a Danish financial institution on interest from Swiss federal bonds. The key question is whether the foreign financial institution has beneficial ownership of the interest income. The financial institution acquired the federal bonds within the framework of so-called cross currency rate swap transactions with precisely agreed terms and maturities. The Federal Supreme Court affirmed the right of use in the specific case and clarified its practice: The right of use is only denied if there is a legal or contractual obligation to forward the income subject to withholding tax. Payment obligations of the recipient are only deemed to be a harmful obligation to forward if the payment or its amount depends on the recipient generating the income subject to withholding tax. Since the financial institution in this case had to make payments irrespective of the receipt of interest on the federal bonds, there was no detrimental obligation to pass on. At the same time, the Federal Supreme Court instructed the lower court to also examine the withholding tax refund with regard to abuse of the agreement. The prohibition of abuse of rights is a separate requirement in addition to the right of use. Approval of the taxpayer's appeal.
- Judgment of October 23, 2024 (9C_408/2024): Direct federal tax and cantonal and communal taxes 2017-2020 (Vaud); in dispute were the deductions claimed by a married couple for maintenance payments to their parents, each living in Oman. The deductions were not granted due to a lack of proof of payment of the contributions. The Federal Supreme Court recalled that stricter requirements are placed on the proof of the financial dependency of the beneficiaries and the payment of the amounts if the beneficiaries are abroad. The appellants were unable to demonstrate to the Federal Supreme Court that the lower courts had arbitrarily assessed the evidence submitted. Dismissal of the taxpayers' appeal.
- Judgment of October 10, 2024 (9C_305/2023) - scheduled for publication: Cantonal and municipal tax and real estate tax 2016 (Geneva); the disputed issue was the allocation of a property with a right of residence for the purposes of wealth tax and cantonal real estate tax. The tax authorities allocated the property to the assets of the person entitled to the right of residence and also levied property tax on the latter. It essentially argued that the right of residence should be treated in the same way as usufruct for tax purposes, especially as the right of residence also grants the beneficiary an "unlimited right of use" to the encumbered property, which is equivalent to the right of use of an owner. In contrast, the Federal Supreme Court held that the right of residence could not be treated in the same way as usufruct, in particular because the beneficiary of the right of residence - in contrast to usufruct - could not rent out the encumbered property. According to the Federal Supreme Court, the differences under civil law between the right of residence and usufruct could not remedy the lack of a legal basis in harmonized and cantonal law for equal tax treatment. The right of residence is therefore attributable to the owner under property tax law. It follows from the same logic that the property tax is to be levied on the owner and not on the person entitled to the right of residence. Approval of the taxpayer's appeal.
- Judgment of October 21, 2024 (9C_450/2024): Household fee pursuant to Art. 69 et seq. RTVA; the appeal of the taxpayer is manifestly unfounded; dismissal in simplified proceedings.
Non-entry/write-off:
Decisions are listed chronologically by publication date.
