Overview of tax law decisions of the Swiss Federal Supreme Court published between January 30 - February 5, 2023:

  • Judgments of 16. December 2022: 2C_744/2022, 2C_745/2022, 2C_746/2022, 2C_750/2022, 2C_753/2022, 2C_755/2022: Direct Federal Tax and State and Municipal Taxes 2018 (Appenzell Ausserrhoden); the six rulings are almost identical in terms of facts and timing and differ only in terms of tax factors: The tax administration rightly did not take up the objection against the discretionary assessment because the objection was not substantiated in due time and was not accompanied by offers of evidence. Furthermore, the discretionary assessment is not null and void because several reminders were issued and the threat of discretionary assessment was pointed out. Finally, it is not apparent in what way the member of the Board of Directors who was partially unable to work could not have organized himself in such a way that the AG could have fulfilled its procedural obligations. Dismissal of the taxpayer's appeal.
  • Judgment of January 16, 2023 (2C_877/2021): Direct Federal Tax and Cantonal and Municipal Taxes 2016 (Geneva); In dispute is whether the taxpayer A. AG made a hidden profit distribution by receiving a loan from its shareholder in 2016 at an interest rate of 4.35%. The lower court assumed a hidden profit distribution, as the interest rate deviated too firmly from the interest rates provided for in the circular of the FTA. The court applied an interest rate of 1.5% to the complainant (interest rate for a first-ranking real estate loan). The complainant argued that the contract it had concluded with its shareholder was a normal loan agreement and not a real estate loan agreement, and that it also stood up to a third-party comparison. The Federal Supreme Court could not agree with this view, as the interest rates of the third party offer were only approximately fixed and still have to be negotiated. Thus, these cannot correspond to the interest rates of the free market. Dismissal of the appeal of the taxpayer A. AG.
  • Judgment of December 13, 2022 (2C_365/2021): Cantonal and communal taxes 2016 (Vaud); Shares in a real estate company under French law, a "société civile immobilière" (SCI), held by a person with unlimited tax liability in Switzerland qualify under domestic Swiss law as movable property on which wealth tax is payable (Art. 3(1) in conjunction with Art. 13(1) StHG). This follows from the fact that Switzerland (in contrast to France) considers SCI as a non-transparent legal entity. Accordingly, the French properties held by SCI are not exempt from taxation in Switzerland/Canton Vaud pursuant to Art. 6 para. 1 LI/VD or are only taken into account in a rate-determining manner. However, the Swiss taxation possibility of the shares in an SCI is limited by the DTA CH-F, since the right of taxation was granted to France by treaty (Art. 24 § 2 para. 2 DTA CH-F). However, Switzerland may only not tax the shares in an SCI if France actually taxes the assets (Art. 25 B § 1 DBA CH-F i.V.m. Additional Agreement of 22 July 1997, RO 2000 1935). In the present case, France did not tax the shares in SCI, since the assets of SCI did not exceed the threshold of EUR 1.3 million, with the result that the Canton of Vaud had rightly subjected the shares to wealth tax. Dismissal of the appeal.
  • Judgment of December 27, 2022 (2C_1052/2021): Anstösserbeiträge (Obwalden); The road owner B passed on part of the remediation costs to the landowner A. The latter subsequently demanded a contestable decree from B. B refused to issue a decree on the grounds that it was acting as a road owner under private law. B refused to issue an order on the grounds that it was acting as a road owner under private law. The Federal Supreme Court held that the party seeking legal remedy who wants to claim that the refusal of the authority violates the prohibition of denial of justice must file an appeal within the usual time limit for appeal (in the present case 20 days) or inquire within a useful period of time about the legal remedies in question. A has failed to do both. Dismissal of the complaint of the taxpayer.
  • Judgment of December 23, 2022 (2C_842/2021): Road contributions; In the matter, the complainants object to the levying of development contributions. The disputed road rehabilitation is not a development; their property had already been fully developed in 1923. Also, the value of their property would not increase as a result of the works. The Federal Supreme Court states that the (first-time) legally compliant design of the road in question leads to a special economic advantage for the owners. The first-time design in conformity with the law would result in an economically relevant advantage insofar as the development is a prerequisite for the realization of (further) construction projects. Furthermore, the complainants complain that the levying of a development fee violates the principle of good faith (Art. 9 BV). However, according to the Federal Supreme Court, the findings of the lower court do not show that any concrete assurances had ever been given that the road had already been developed in a manner that met the legal requirements. The Federal Supreme Court concludes that the complainants can therefore not derive anything in their favor from the right to protection of legitimate expectations. The appeal in matters of public law is dismissed.

Decisions on non-admission and write-offs:

Decisions are listed chronologically by publication date.