Decisions of the Swiss Federal Supreme Court (CW 51 - 2024)

Overview of the tax rulings of the Swiss Federal Supreme Court published between December 16 - 22, 2024:

Judgment of November 15, 2024 (9C_375/2024): VAT 2012-2017; in dispute is whether the Federal Administrative Court violated the law when it denied an additional tax claim against the University of Zurich for the "traffic medical reports" in the years 2014-2017. The University requested information from the FTA regarding the qualification under tax law, but the FTA provided incorrect information in an email dated June 9, 2010. In a letter dated May 11, 2012, the FTA stated that the information it had previously provided was to be corrected. However, this letter does not contain any specific statement as to whether the expert reports prepared by the University of Zurich are exempt from tax or not. The letter of May 11, 2012 was not able to shake the University of Zurich's confidence in the accuracy of the information. The Federal Administrative Court therefore did not violate any law. Dismissal of the FTA's appeal.
Judgment of December 3, 2024 (9F_19/2024): Household fee pursuant to Art. 69 et seq. RTVA, 2021 levy period; the levy payer again requests the revision of an earlier Federal Supreme Court judgment. As a result, the request for revision proves to be manifestly unfounded in all applications and must therefore be dismissed without an exchange of briefs or other instruction measures (Art. 127 BGG), insofar as it can be considered at all. Dismissal of the taxpayer's appeal.
Judgment of December 4, 2024 (9C_308/2024 and 9C_309/2024): Direct federal tax and state and municipal taxes 2009-2010 (Appenzell Ausserrhoden); at issue is the fine imposed on a trustee for aiding and abetting completed tax evasion in 2010 as well as his claim for compensation/compensation. The trustee argued that the statute of limitations had (also) expired for the year 2010. However, the Federal Supreme Court ruled that the objection decision of April 20, 2020 contained all the material elements of a ruling and therefore had the effect of suspending the statute of limitations. In addition, the Federal Supreme Court found no basis for a claim for compensation/compensation. Dismissal of the trustee's appeal.
Judgment of November 27, 2024 (9C_302/202) - intended for publication: MWST 2014 - 2017; the formula that has been used for decades, according to which the Federal Administrative Court imposes a "certain restraint" when reviewing discretionary assessments, must be adhered to. This has no explicit legal basis either in substantive law (VAT law) or in procedural law. The self-restraint is based on a practical necessity and is not objectionable from a legal point of view as long as it does not degenerate into a mere arbitrary examination. Dismissal of the taxpayer's appeal.
Judgment of December 3, 2024 (9C_585/2024): State and municipal taxes 2009 and 2010 (Zurich); the judgment was preceded by various proceedings regarding tax liability in the canton of Zurich and the canton of Appenzell Ausserrhoden. It was disputed whether the taxpayer should be assessed for the 2010 tax period by way of the ordinary procedure and not in a supplementary tax procedure; dismissal of the taxpayer's appeal.
Judgment of December 3, 2024 (9C_635/2024): Direct federal tax and state and municipal taxes 2021 (Lucerne); free administration of justice; it was disputed whether the cantonal court had rightly not granted the second application for free administration of justice submitted by the liable parties. The first application was rejected due to an established surplus income, which was confirmed as lawful by the Federal Supreme Court (see our article of April 21, 2024). The disputed second application was in fact a reconsideration application, with which significant facts or evidence would have had to be asserted that the appellant was not aware of in the previous proceedings or that it was legally or actually impossible for it to assert at the time or that it had no reason to assert (so-called non-genuine novelties). The appellant did not submit any such facts or evidence. Dismissal of the taxpayer's appeal.
Judgment of December 9, 2024 (9C_220/2024): Direct federal tax and state and municipal taxes 2006-2009 (Schaffhausen); supplementary tax proceedings; the background was a considerable increase in the spouses' assets, which they were unable to declare. The Schaffhausen tax administration requested assistance from the ASU. The taxpayer's business model was based on the fact that so-called specialists provided development services for the sole proprietorship C.. In order to preserve the identity of the persons involved, the services provided were not paid for directly by C., but via offshore development companies, which in turn invoiced C.. The expenses invoiced by the development companies since 2003 were essentially qualified as fictitious. The spouses were unable to provide any evidence to the contrary. Dismissal of the appeal by the taxable spouses.
Judgment of November 25, 2024 (9C_511/2023): Direct federal tax and cantonal and communal taxes 2014-2017 (Neuchâtel); tax evasion; for the tax periods 2014 to 2017, the taxable couple A. was assessed at their own discretion due to failure to submit a tax return. These assessments became final and unchallenged. The subsequently submitted tax returns for the relevant tax periods showed a higher taxable income than had been assessed in the discretionary assessments. The additional tax levied on the difference became final after the objection was partially upheld. The fine for completed tax evasion was set at 75% of the evaded tax. The taxpayers were unable to assert any violation of the law by the lower courts before the Federal Supreme Court. Dismissal of the taxpayers' appeal.
Judgment of November 26, 2024 (9C_119/2024): Direct federal tax and state and municipal taxes 2021 (Zurich); restoration of the deadline; the tax administration did not respond to the objection raised against the 2021 assessment due to lateness. The subsequent appeal and complaint were also late. Before the Administrative Court, the taxpayer asserted a reason for restoring the deadline due to illness and submitted a medical certificate for the first time. In this context, he complained that the lower courts had breached their duty of investigation by not asking about the reason for the delay and not requesting corresponding evidence. The Administrative Court denied a violation of the law and disregarded the medical certificate as an inadmissible novum. This legal opinion was confirmed by the Federal Supreme Court. Dismissal of the taxpayer's appeal.
Judgment of December 2, 2024 (9C_435/2024): Direct federal tax and cantonal and communal taxes 2009-2014 (Geneva); supplementary tax proceedings; the obligor, who died during the proceedings, worked as a self-employed bailiff in the canton of Geneva. After the FTA carried out an administrative criminal investigation but closed it due to the statute of limitations, the Geneva tax administration opened supplementary tax proceedings for the tax periods 2007 to 2014, as the debtor did not declare his turnover in full and did not declare a bank account at all. His heirs were unable to provide the requested bank statements and were unable to prove that the additional tax factors determined for the years 2009 to 2014 were incorrect. Dismissal of the taxpayer's appeal.
Judgment of November 25, 2024 (9C_168/2023, 9C_176/2023) - for publication: Turnover tax 2011-2016; with regard to the transfer of a participation within the group (transaction A), the Federal Supreme Court confirms the decision of the lower court that this is exempt from turnover tax, as it is a transfer of an indirect participation of 39.9%, which fulfills the requirements of Art. 14 para. 1 lit. j StG. With regard to the tax treatment of employee participation programs in the form of performance share units (PSUs) and restricted stock units (RSUs) (transaction B), the Federal Supreme Court concluded that the transfer of PSUs and RSUs is not subject to turnover tax. The lower court had argued that the transfer of PSUs and RSUs was for consideration, as it was to be understood as consideration for the employees' work performance. However, the Federal Supreme Court clarified that the allocation of the units is not linked to a clearly defined work performance and therefore does not constitute a transaction for consideration within the meaning of Art. 13 para. 1 StG. Approval of the taxpayer's appeal; rejection of the FTA's appeal.
Judgment of November 27, 2024 (9C_19/2024, 9C_20/2024) - for publication: Corporate levy pursuant to Art. 70 et seq. RTVA (2021 tax period); the Federal Supreme Court dealt with the question of the constitutionality of the degressive structure of the tariff for the corporate fee pursuant to Art. 67b para. 2 RTVO. The complainant argued that this structure violated the principle of legal equality and the principle of taxation according to economic performance, as smaller companies were proportionally more heavily taxed than larger ones. The Federal Supreme Court ruled that the rate was unconstitutional, but decided in an appeal ruling that it should continue to be applied for reasons of legal certainty and proportionality until a new (constitutional) rate came into force. Dismissal of the appeal by the taxpayer and the FTA.
Ruling of November 28, 2024 (9C_296/2024, 9C_365/2024): VAT 2013-2017; use of a helicopter; as the taxable person adjusted the price per private flight hour several times after the ruling request, the legally binding effect of the ruling no longer applies. Dismissal of the taxpayer's appeal. With regard to the FTA's appeal, the matter was referred back to the FTA for a new ruling.
Judgment of November 28, 2024 (9C_363/2024) - scheduled for publication: MWST 2014-2019; in the present case, the question to be examined is whether the taxable foundation must continue to be protected in its reliance on information from the FTA regarding the determination of entrepreneurial activity (40% entrepreneurial and 60% non-entrepreneurial activity). The constitutional protection of legitimate expectations requires, among other things, that the person seeking justice must have made decisions in reliance on information that cannot be reversed without disadvantage. In VAT law, there is a right to official information on the basis of Art. 69 of the VAT Act. It has been rightly pointed out that this requirement cannot apply in the area of Art. 69 of the VAT Act. In the present case, the amendment of a practice determination following BGE 141 II 199 (illegality of the 25/75 percent practice) and other Federal Supreme Court rulings on the subject also do not mean that the taxable person can no longer rely on the information provided to them. With the exception of one year, the entrepreneurial income was always above 40%, so that adherence to the information does not have a one-sided effect in favor of the taxpayer. As there are no relevant changes to either the legal situation or the actual circumstances, the taxpayer's trust must be protected until the information is revoked. Dismissal of the FTA's appeal.

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