Overview of the tax law decisions of the Swiss Federal Supreme Court published in the week of 5 - 11 November 2018.

  • Judgment of 28 September 2018 (2C_1009/2017): Direct federal tax and cantonal and communal tax 2008 - 20013 (Valais); hidden profit distribution by a real estate company in favour of its shareholder. Offsetting of rent which was not considered to be in line with market conditions. The offsets made by the tax authorities in relation to the sale of properties to a related company were made in the wrong tax period (2008 and 2010 instead of 2007 and 2009), in the opinion of the Federal Court. The reason for this is the timing of the realisation of the gain in connection with the sale of these properties. In principle, a gain is realized when an enforceable claim exists, which in casu is already the case at the time the sales contract is concluded. There is no reason to believe that its execution was uncertain at the time of conclusion. Partial acceptance of the complainant's complaint.
  • Judgment of 24 October 2018 (2C_375/2018): Value added tax (VAT); 1st quarter 2006 to 4th quarter 2009; interior design services in connection with real estate fall under Art. 14 Para. 2 lit. a aMWStG (corresponds approximately to the wording of the current Art. 8 Para. 2 lit. f MWStG). As X. SA, which is subject to VAT in Switzerland, carries out such interior design and management services (going on site in casu to monitor the evolution of the construction work) on behalf of A. SA and B. SA, which are domiciled in Switzerland. SA established in Switzerland in relation to a property located in Qatar, X. SA has provided a foreign service which is not subject to VAT.
  • Judgment of 25 October 2018 (2C_930/2018): Direct Federal Tax and Cantonal and Municipal Tax 2011 - 2012 (Geneva); the application for suspension of proceedings is rejected; the appeal is dismissed in so far as it is admissible
  • Judgment of 5 October 2018 (2C_56/2018): Refund of withholding tax (Zurich); on the occasion of an audit, the Zurich Cantonal Tax Office found that the taxpayers had received a dividend of CHF 350,000 in 2012 from a public limited company in which they held an interest. The amount in question was set off against the taxable income of the persons concerned and the refund of the withholding tax of CHF 122,500 due on the dividend was refused. "The complainants may well have declared their shareholding, but not the dividend distributed to them; nor did they enclose with their tax return a certificate of the distribution received. Thus, the omission to declare the gross income in 2012 did not have to become obvious to the assessing authority just by perusal of the enclosures, but only on the basis of a separate verification, not made directly with the complainants, after specific clarification of the correctly declared dividend distribution made by the concerned corporation." The denial of the right to a refund also does not constitute a penalty of a punitive nature, especially since only the absence of a spontaneous declaration is presumed and there is no need to additionally examine whether the omission that occurred must have been negligent or otherwise culpable. The rules of (tax) criminal law and the ECHR, which require culpability, therefore do not apply and the Federal Supreme Court's case law does not prove to be contrary to the ECHR (the refusal to refund withholding tax is not punitive in nature). The appeal is dismissed.
  • Judgment of 12 October 2018 (2C_699/2017): Parking fees (Schwyz); Art. 3 para. 4 SVG in connection with § 36 StraG/SZ and §§ 81 f. JG/SZ in conjunction with the GebO/SZ do not constitute a sufficient legal basis to justify the levying of parking fees for increased public use by municipalities. Based on the autonomy of the municipalities and their sovereignty over the public ground, the municipalities are in principle entitled to levy user charges, but the obligation to pay charges must be laid down in a formal law at the municipal level. The present parking concept adopted by the municipal council (executive body of the municipality), which provides for the controversial parking fees, is not a formal law and therefore does not constitute a sufficient legal basis (violation of the principle of legality). The appeal is upheld and the contested decision of the Administrative Court of Canton Schwyz is overturned.
  • Judgment of 24 October 2018 (2C_886/2018): Direct federal tax and state and municipal tax 2013 (Schwyz); sale of a motorboat by a company to its main shareholder; offsetting of an unrecorded share of the profit as, in the opinion of the cantonal tax administration, the proceeds obtained of CHF 175,000 do not satisfy the third-party comparison. The Federal Supreme Court is of the opinion that an estimated market value of CHF 225,000 (as determined by the tax administration) does justice to the individual concrete case and stands up to federal law and constitutional law. Accordingly, the exaggerated depreciation that had to be made due to the loss-bearing sale is to be corrected to the corresponding extent. The appeal proves to be unfounded and must be dismissed.
  • Judgment of 25 October 2018 (2C_709/2017): Value Added Tax (VAT) 2010 - 2013; the appellant is unable to prove that the transactions subject to VAT by the Federal Administration were carried out abroad, or that they were exports; the appeal is dismissed

Decisions concerning visitor's tax:

  • Judgment of 8 October 2018 (2C_1127/2016, 2C_1148/2016, 2C_1149/2016, 2C_1151/2016): Visitor's tax; holiday flats (Valais); the complaints are partially approved. Art. 6 para. 2 of the visitor's tax regulations of the former residents' communities of Blitzingen, Grafschaft, Münster-Geschinen and Reckingen-Gluringen are repealed insofar as they provide for an average occupancy rate of 57 days. For the rest, the appeals are rejected to the extent that they can be upheld.
  • Judgment of 8 October 2018 (2C_1147/2016): Visitor's tax; holiday flats (Valais); the appeal is partially upheld. Art. 6 para. 2 of the Visitor's Tax Regulations of the municipality of Bellwald is annulled insofar as it provides for an average occupancy rate of 54 nights. For the rest, the appeal is dismissed in so far as it can be upheld.
  • Judgment of 8 October 2018 (2C_1150/2016): Visitor's tax; holiday flats (Valais); the appeal is partially upheld. Art. 6 para. 2 of the Visitor's Tax Regulations of the Municipality of Obergoms is annulled insofar as it provides for an average occupancy rate of 57 days. For the rest, the appeal is dismissed in so far as it can be upheld.
  • Judgment of 8 October 2018 (2C_672/2017): Public charges; visitor's tax; second homes (Schwyz); the complaint is upheld. The decision of the Administrative Court of the Canton of Schwyz is overturned and the decisions of the Muotathal Municipal Council to appeal are confirmed.
  • Judgment of 8 October 2018 (2C_742/2017): Abstract norm control Visitor's tax regulations Bürchen (Valais); the complaint is partially approved. Art. 6 paras. 2 and 3 of the Bürchen Municipality Visitor's Tax Regulations are repealed in so far as they provide for an average occupancy rate of 49 nights. For the rest, the appeal is dismissed in so far as it can be upheld.
  • Judgment of 8 October 2018 (2C_794/2017): Visitor's tax regulations Bürchen; Abstract standard control (Valais); the complaint is partially approved. Art. 6 para. 2 and para. 3 of the Bürchen Municipality Visitor's Tax Regulations are repealed insofar as they provide for an average occupancy rate of 49 nights. For the rest, the appeal is dismissed to the extent that it can be upheld.
  • Judgment of 8 October 2018 (2C_815/2017): Abstract standard control of visitor's tax regulations Bürchen (Valais); the appeal is partially upheld. Art. 6 para. 2 and para. 3 of the visitor's tax regulations of the municipality of Bürchen are repealed insofar as they provide for an average occupancy rate of 49 nights. For the rest, the appeal is dismissed to the extent that it can be upheld.
  • Judgment of 8 October 2018 (2C_825/2017): Abstract norm control Kurtaxenreglement Unterbäch (Valais); the complaint is partially approved. Art. 6 para. 2 of the Visitor's Tax Regulations of the municipality of Unterbäch of 22 June 2017 is repealed insofar as it provides for an occupancy rate of 35 nights. For the rest, the appeal is dismissed.
  • Judgment of 8 October 2018 (2C_843/2017): Abstract standard control of visitor's tax regulations Bürchen (Valais); the complaint is partially approved. Art. 6 para. 2 and para. 3 of the Bürchen Municipality Visitor's Tax Regulations are repealed insofar as they provide for an average occupancy rate of 49 nights. For the rest, the appeal is dismissed to the extent that it can be upheld.
  • Judgment of 8 October 2018 (2C_91/2016): Complaint against the regulation on visitor's tax of the municipality of Saas-Grund of the State Council of the Canton of Valais of 2 December 2015; Art. 3 lit. b sentence 2 of the contested regulation on visitor's tax can be interpreted without difficulty in conformity with the Constitution, which is why a repeal of the contested provision of the regulation on visitor's tax is ruled out in practice. The appeal proves to be unfounded and must be dismissed in its entirety.

Non-occurrence decisions / inadmissible complaints:

Decisions are listed chronologically by publication date.

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