Overview of the tax law decisions of the Swiss Federal Supreme Court published in the week from 2 to 8 December 2019.

  • Judgment of 12 November 2019 (2C_838/2018, 2C_839/2018, 2C_840/2018, 2C_841/2018, 2C_842/2018, 2C_843/2018): Inheritance tax; after-tax (Berne); after-tax proceedings for inheritance tax on assets transferred to a Liechtenstein foundation that were neither declared nor recorded in the inheritance inventory. The lower court, when interpreting in good faith the tax administration's notification, made on the basis of a voluntary declaration, that "initially" an after-tax procedure would be initiated in respect of direct taxes, came to the conclusion without arbitrariness that the forfeiture deadline for the subsequent collection of inheritance tax, which was not actually effected until later, had been met; rejection of the taxpayers' complaint.
  • Judgment of 26 July 2019 (2C_653/2018): Administrative assistance double taxation treaty Switzerland - France (DTA CH-FR); ("UBS case"); delimitation of group and list requests; admissibility of group or list requests in temporal terms: the temporally limited scope of application of the agreement of 25 June 2014 on the amendment of the Additional Protocol to the revised DTA CH-FR applies only to group requests, but not to the list requests relevant in this case. List requests are therefore admissible for periods from 1 January 2010. Probable materiality: The distinction from an inadmissible "fishing expedition" is made according to the same criteria as for group requests; in this context, the requesting authority must also present concrete indications of a failure to comply with tax law obligations. If the request concerns a list of potentially taxable persons who are individualized by account numbers, the suspicions do not have to relate to the individual persons, but in a general manner to the persons in this group. Depending on the circumstances, the manner in which the requesting state became aware of the list may also be an indication that the account holders have not complied with their tax obligations. The circumstances surrounding the receipt of the lists of accounts on which the list request is partly based (German criminal investigation), the findings to date from investigations by the requesting authority and other circumstances, taken together, give rise to sufficient suspicion that the persons concerned have acted in breach of tax law. The requesting authority has provided sufficient assurances regarding its duty of confidentiality and the principle of subsidiarity, which is why there is no obstacle to administrative assistance from this perspective either. UBS's further arguments regarding the prohibition of the obligation to incriminate oneself and the principle of subsidiarity are also not capable of influencing this result. Appeal of the FTA upheld. In this context, see also our article of 27 July 2019 regarding the Federal Supreme Court's media release on this matter.
  • Judgment of 14 November 2019 (2C_414/2019): Direct Federal Tax and State and Municipal Taxes 2014 (Solothurn); manifestly incorrect determination of the facts. The objective burden of proof for tax-reducing or tax-removing facts lies with the taxable person. In the case of self-employment, proof must be furnished in fact that both the service and the consideration have been provided if the service is claimed as business expenditure. The mere invoicing of a service does not prove that it has actually been performed. In particular, if the beneficiary has a significant interest in the company providing the service, the Federal Supreme Court requires clear accounting delimitation and documentation of the service. Approval of the complaint by the tax administration.
  • Judgment of 19 November 2019 (2C_913/2019): Improvement contributions; order for contributions; procedural law; preliminary ruling; appeal against an order for contributions issued by the municipality for the construction of a new road before the expropriation court of the Canton of Ticino. The complainant invoked the method of calculating the contribution and the infringement of certain procedural rights. The expropriation court issued a preliminary ruling: it dismissed the violation of the procedural rights and dismissed the case to the municipality for a new calculation of the improvement contributions. The complainant lodged an objection against this with the Administrative Court of the Canton of Ticino, which was not appealed against: The requirements of Art. 66 (2) "Legge sulla procedura amministrativa, LPAmm" (similar to Art. 93 BGG) concerning the admission of an appeal against preliminary and interim decisions were not fulfilled. The rejection of the case for the new calculation of the improvement contributions does not cause any irreparable disadvantage, but only a procedural deferment. In addition, a significant expenditure of time or costs for an extensive evidence procedure on the part of the previous instance is excluded. The Federal Supreme Court confirmed the decision of the Administrative Court to dismiss the taxpayer's appeal.
  • Judgment of 11 November 2019 (2C_894/2019): Real estate gains tax 2012 (Berne); start of interest calculation. At the request of the buyer, the GrGSt was deposited in a blocked account (September 2012 = land register entry). The assessment became legally binding (February 2013). In the summer of 2015, the tax administration complied with the taxpayers' application, offsetting the operating loss from the HSD (Kt ZG) in the NSD (Kt BE), which reduced the GrGSt by CHF 1.3 million. The credit was subject to 3% interest from February 2013 - August 2015. The only disputed issue was the start of the interest calculation: land register entry September 2012 or due date of the GrGSt February 2013. In the Canton of Berne, the GrGSt becomes due with the delivery of a definitive or provisional invoice. The Canton of Berne does not provide for any advance payment of GrGSt. The corresponding ordinance on the receipt and payment of interest states in particular that the interest obligation for interest on arrears and remuneration exists "only for invoiced tax amounts". There is no constitutional obligation to pay prepayment interest. The Canton of Berne has a statutory security right over real property to secure the GrGSt, which is created outside the book, i.e. without entry in the land register. There is no legal obligation to pay into a blocked account. If the parties agree on a security under the essentialia negotii, this is based exclusively on civil law and does not affect the creation of the tax claim. Then, according to Bernese tax law, the interest calculation does not begin until the invoice is issued. The complaint proves to be unfounded and is dismissed.
  • Judgment of 14 November 2019 (2C_119/2018): State and municipal taxes 2014 (Zurich); the lower instance rightly set off the negative equity item (own capital shares or treasury shares) in the defendant's commercial balance sheet against the other open reserves and thus deducted it from taxable equity; dismissal of the appeal by the tax office.
  • Judgments of 21 November 2019 (2C_943/2019): Direct federal tax and state and municipal taxes 2012 (Canton of Ticino); free administration of justice; dismissal on the grounds of lack of prospects confirmed by the Federal Court of Justice; whether there are sufficient prospects of success in individual cases is assessed on the basis of a preliminary and summary examination of the prospects of proceedings, with the circumstances at the time the application is submitted being decisive; dismissal of the taxpayers' complaint.
  • Judgment of 1 October 2019 (2C_1071/2018): Emissions levy. The capital increase from the year 2015 to be assessed was not so closely related in time and factually terms to the "quasi-merger" in 2014 that it could be considered a uniform restructuring process within the meaning of Art. 6 para. 1 lit. abis StG. According to the May 2015 AGM resolution, shareholders could choose to pay either a cash or a share dividend (AGM resolution to create new conditional capital for the purpose of a cash or share dividend). The shareholders who voted for the stock dividend had not subscribed to the new shares by means of offsetting liberalisation due to a lack of a claim to payment of a cash dividend, nor had they waived their right to payment of a cash dividend. The shares have been issued without consideration and only the nominal value is taxable. Partial approval of the FTA complaint.
  • Judgment of 14 November 2019 (2C_889/2019): Direct Federal Tax and State and Municipal Taxes 2014 (Freiburg); alleged errors in the application and/or interpretation of the relevant law cannot be challenged on a review basis. If taxpayers do not agree with the application and/or interpretation of federal law, the ordinary legal remedy (i.c. appeal to the Federal Supreme Court) must be taken. Whether the income from employee participation is taxable in Switzerland or abroad is a purely legal question. With the submission of a rectified wage statement, a previous declaration of knowledge is replaced by a new one, without this necessarily leading to a different legal assessment. Rejection of the complaint.
  • Judgment of 25 November 2019 (2C_423/2019): Direkt Bundessteuer und Staats- und Gemeindesteuern 2014 (Freiburg); qualification of participation rights in a GmbH active in the real estate sector as private or business assets of a taxpayer active in insurance brokerage. Participation rights constitute business assets if there is a close economic connection between the participation and the taxpayer's business activities. Such a close relationship is presumed to exist if the investment was acquired for business purposes or if the acquirer exercises significant influence over the entity that corresponds to or complements its own activities and thereby enables it to expand its own activities. In the present case, the activities of the holding and of the individual company overlap. The investment was financed with funds from working capital and originally accounted for as working capital of the individual company. In addition, the investment and the individual company shared the premises, infrastructure and employees. The investment represents business assets. The dissolution of the sole proprietorship represents a private withdrawal of the participation.

Non-occurrence decisions / inadmissible complaints:

Decisions are listed chronologically by publication date.