Decisions of the Swiss Federal Supreme Court (CW 50 - 2020 )

Overview of the tax law decisions of the Swiss Federal Supreme Court published in the week of 7 - 13 December 2020.

Judgment of 19 November 2020 (2C_610/2020): Fiscal domicile; Legal aid: No free administration of justice, as assistance from a lawyer is objectively not necessary. The taxpayer filled in the questionnaire to determine his tax domicile himself and was also able to lodge an appeal with the cantonal court. Rejection of the taxpayer's appeal.
Judgment of 23 November 2020 (2C_419/2020): Direct federal tax and state and municipal taxes in 2014 and 2016 (Geneva); the dispute is whether the sale of two properties constitutes self-employment. This is affirmed in the present case on the grounds that the taxpayer was actively involved in the real estate sector. He was involved in 42 real estate transactions and worked on real estate projects in partnership with real estate professionals. He also had the professional knowledge. Rejection of the taxpayer's complaint.
Judgment of 21. October 2020 (2C_356/2020): Value added tax; Kongresshaus-Stiftung Zürich is an institution under public law with the purpose of providing and operating the congress and concert building in Zurich; For this purpose, the foundation received a non-interest-bearing endowment capital from the city of Zurich; The foundation also assumed the building lease for the congress and concert hall building, for which it paid the city of Zurich a symbolic CHF 1,000 per year; According to the FTA, these are subsidies that result in a proportional input tax deduction, whereas the foundation claimed a contribution; The decisive factor for the delimitation is whether the community receives a participation for the contribution (also of a purely economic nature) or whether the contribution constitutes an expense for the community; In the present case, the endowment capital is to be qualified as a contribution; The annual saving of the building lease interest is considered a subsidy; Complaint of the taxpayer partially upheld.
Judgement of 11 November 2020 (2C_684/2019): State and municipal taxes, direct federal tax 2016 (Lucerne); the taxpayer was assessed as a discretionary taxpayer in the Canton of Lucerne for failure to file a tax return as a taxpayer subject to unlimited taxation. In his objection, he merely submitted the auxiliary form for real estate and took the position that he had tax residence in the Canton of Zug. By failing to submit a tax return, he breached his obligations to cooperate. As a result, the Canton of Lucerne was not obliged to issue a tax domicile decision regarding state and communal taxes in advance. Moreover, it should be noted that the FTA had no reason to issue an ex officio domiciliation ruling for direct federal tax, as it had been clear to it since the 2003 tax period that direct federal tax was to be levied by the Canton of Lucerne. The auxiliary form alone was not sufficient to prove the obvious incorrectness of the assessment under the given circumstances. Rejection of the taxpayer's complaint.
Judgment of 11 November 2020 (2C_857/2019): State and municipal taxes 2010 (Zug); the taxpayer was assessed as a person liable to unlimited tax liability in the Canton of Lucerne on a discretionary basis due to the failure to submit a tax return The objections were not upheld and the decisions became final. The tax administration of the Canton of Zug issued a corresponding decision on the objection and assessed the taxpayer only on the basis of economic affiliation. However, the taxpayer took the view that his tax residence was in the Canton of Zug. The Canton of Zug has to examine such an argument in principle, because it would be tantamount to an inadmissible formal denial of rights if the Canton of Zug did not carry out any examination of its own as regards tax residence on the basis of a ruling in the Canton of Lucerne. However, the taxpayer has forfeited his right of appeal against intercantonal double taxation. Dismissal of the taxpayer's appeal against the Canton of Lucerne, non-occurrence of the taxpayer's appeal against the Canton of Zug in the light of the prohibition of deterioration.
Judgment of 11 November 2020 (2C_96/2020): The issuing of a freezing order was not arbitrary at that time; the costs imposed on the taxpayer thereafter by the lower instance in the context of its write-off decision are therefore protected; dismissal of the taxpayer's appeal.
Judgment of 27. November 2020 (2C_835/2017): Withholding tax already refunded (2008 and 2009); Refund of withholding tax (2010 and 2012); The dispute is whether the taxpayer who is an American citizen has a permanent residence in the USA and can therefore invoke the DBA CH-USA; After considering the evidence submitted, the lower instance concluded that the taxpayer does not have a permanent residence in the USA within the meaning of the DBA; dismissal of the taxpayer's appeal and obligation to refund withholding tax.

Non-entry decisions: