Overview of the tax law decisions of the Swiss Federal Supreme Court published in the week of 15 - 21 November 2021.

  • Judgment of 1 November 2021 (2C_647/2021): Value added tax 2011-2014; reduction of the taxable performance; in dispute and to be examined was whether the advance payment credits transferred by the general contractor A. AG to F., C. and G., who held a joint account, and to D. AG justified offsetting the tax liability of A. AG. Without knowing the exact reason and purpose of the issued credit notes, it cannot be assumed that they are directly related to the construction of the building. The A. AG should have provided evidence to determine the true reason for the payments made. Dismissal of the taxpayer's appeal.
  • Judgment of 19. October 2021 (2C_1052/2020): Direct Federal Tax and State and Municipal Taxes 2017 (Appenzell Innerrhoden); The provisions of the Criminal Procedure Code are not applicable to tax evasion; The lower court correctly concluded that the interception of the trustee (as a respondent) and of his wife (as a witness), who should have testified to the poor state of health of her husband at the time of the preparation of the 2017 annual financial statements, was not necessary; The fact that the amount of CHF 80,000 was not booked could not reasonably have escaped the attention of the knowledgeable sole shareholder. The sole shareholder did not take any steps to verify the financial statements or tax return prepared by the trustee. The omissions proved to be so serious that, in accordance with federal law, knowledge could be inferred from intent; dismissal of the taxpayer's appeal.
  • Ruling of 29 October 2021 (2C_345/2021): Staats- und Gemeindesteuern 2018 (Schwyz); Bemessungsgrundlage, Eintrittsschwelle und Steuertarif für natürliche Personen; Support from public or private funds (namely benefits from social assistance) and supplementary benefits to AHV/IV not subject to income tax is in conformity with federal law. Furthermore, in principle everyone has to contribute to covering the costs of the public purse. Therefore, pensions from the first pillar are taxed taking into account the social deductions and the cantons can adhere to a minimum taxation. The Federal Supreme Court does not examine the political expediency of a degressive progression of the tax scale. The layperson's appeal is dismissed insofar as it is to be upheld.
  • Judgment of 5 November 2021 (2C_901/2020; 2C_903/2020): Administrative assistance DTA CH-IN; at issue was whether the requested state can itself define who the person is who is the subject of a control or investigation in the requesting state, based on elements of the internal procedure in the requesting state and, if necessary, deviate from the person designated in the request for administrative assistance. In its ruling, the Federal Administrative Court held that the requirements for granting administrative assistance were fulfilled, but that the disputed request for administrative assistance was not directed against A.A., but against the community of heirs of the deceased D. The request for administrative assistance was made in the course of the proceedings before the Federal Administrative Court. In the course of the proceedings before the Federal Administrative Court, A.A. submitted a ruling by the Indian Tax Court proving that controls and investigations were not being carried out against A.A., but against the community of heirs of the deceased D. This document is capable of raising serious doubts about the identity of the person. The Federal Administrative Court cannot therefore be accused of calling the request for administrative assistance into question on this point, contrary to the FTA. However, it was not entitled to simply regard it as proven that the disputed request for administrative assistance in fact concerned the community of heirs of the deceased D. Partially upheld the FTA's appeal and referred back to the FTA in accordance with the recitals.
  • Ruling of 9 November 2021 (2C_93/2021): Direct federal tax and cantonal and communal taxes 2007 (Geneva); revision of an assessment; the taxpayer had paid tax on his half share in a profit of a construction consortium in the 2007 tax period. The corresponding assessment became legally binding. Within the scope of an after-tax proceeding concerning the tax period 2006, the same profit was offset against a company in which the taxpayer holds an interest, on the grounds that the proceeds accruing directly to the construction consortium would have been due to the company. The offsetting was challenged before the Federal Supreme Court, which only had to decide whether the lower court was right not to hear the appeal due to delay. Within 90 days of this Federal Supreme Court decision, the taxpayer requested a revision of his 2007 assessment. In this regard, it was determined without arbitrariness that the taxpayer, as a member of the company's board of directors, must have had knowledge of the new fact (set-off) earlier, which is why the request for revision was late. From a substantive law perspective, it was also doubtful whether an appeal would have been possible in view of the legally intended double taxation, namely also because the partial taxation regulation was not yet in force at that time. Dismissal of the taxpayer's appeal.
  • Judgment of 21 October 2021 (2C_649/2021): Direct Federal Tax and State and Municipal Taxes 2012 (Zurich); Request for recusal; In the present case, the taxpayer was unable to prove the bias of the tax commissioner. Dismissal of the appeal.

Non-occurrence / correction:

Decisions are listed chronologically by publication date.

Tax topics covered in this post:
Value Added Tax (VAT)
Profit Tax
International Tax
Treaties
Income Tax