Overview of tax law decisions of the Swiss Federal Supreme Court published between December 19 - 25, 2022:
- Judgment of November 18 (2C_252/2022, 2C_253/2022): State and municipal taxes 2016-2017 (Aargau); the complainants essentially complain about the opening of the imputed rental value of their property: According to the complainants, the adjustment decree does not "automatically" revoke or revise the legally binding ruling of the previously applicable imputed rental value, but rather the new imputed rental value should have first been separately issued by the cantonal tax office. This was not done, which is why the increase affecting them was not notified to them in accordance with the law. The fact that the cantonal legislator did not insert an exception in § 219 para. 1 StG/AG, according to which in the case of a (general-abstract) adjustment decree the issuance of a decree can be dispensed with, does not yet constitute an unlawfulness under federal law. In the present case, it is not apparent in what way the lower court applied §§ 218 et seq. StG/AG in a manner contrary to federal law. Dismissal of the taxpayer's appeal.
- Judgment of November 24, 2022 (2C_123/2022): Direct federal and cantonal taxes 2011-2014 (Ticino); the offsets made for the booked fees are not objectionable. Dismissal of the taxpayer's appeal.
- Judgment of 22 November 2022 (2C_2/2022) - intended for publication: Value Added Tax 2012-2015; In the present case, it is disputed whether the funds for the construction of the community center have accrued to the Servicestelle (DS) Liegenschaftsverwaltung in the form of a subsidy or another contribution under public law pursuant to Art. 18 para. 2 lit. a MWSTG and therefore the input tax deduction pursuant to Art. 33 para. 2 MWSTG is to be reduced proportionately. The lower court took the view that the funds transferred to the DS Property Management for the purpose of the construction of the community center had indeed accrued to the latter, but were contributions to companies pursuant to Art. 18 para. 2 lit. e VAT Act. The term subsidy is subject to interpretation. According to the wording of the various language versions, subsidies are, according to common usage, financial support contributions paid by the state to persons or groups that are usually private. As long as the public authority does not spend the funds, but merely transfers them to another DS, it does not provide a subsidy according to common usage. Teleological and tax system considerations also speak against considering the funds transferred to the DS Property Management as a subsidy or other contribution under public law. The lower court bindingly determined for the Federal Supreme Court that the funds once made available to the DS Liegenschaftsverwaltung for the investment would again accrue to the municipality if the latter decided to sell all properties, dissolve the DS Liegenschaftsverwaltung and henceforth rent all required premises from third parties. The other DSs would therefore not lose access to the funds in question. If the community can dissolve the receiving DS and thus access the funds made available, as the lower court explains, the relevant flow of funds without consideration cannot constitute an expense for the community or for the donating DS and no income for the receiving DS and thus, according to the case law, cannot fall under Art. 18 para. 2 lit. a VAT. Contrary to the representation of the FTA, purely accounting flows of funds within the same community are not comparable with flows of funds from the community to private recipients. Furthermore, there is also a qualitative difference between flows of funds within the same community and flows of funds between different communities. If flows of funds within the same community cannot constitute subsidies, it does not follow that flows of funds between different communities cannot fall under Art. 18 (2) (a) VAT Act. It is true that the special regulation of tax subjectivity in Art. 12 VAT Act allows communities, at least in certain constellations, to optimize their VAT position, especially with regard to the input tax deduction, by organizing their DS accordingly and that Art. 12 VAT Act contains a certain potential for a redistribution of public funds from the Confederation to the cantons and municipalities. However, this does not justify an extension of the concept of subsidy and the reduction of the input tax deduction, which, according to case law and unanimous doctrine, would precisely not be appropriate due to the systemic inconsistency of Art. 33 (2) MWSTG. However, the potential for abuse inherent in the provision of Art. 12 VAT Act can be countered under the heading of tax avoidance. In summary, it can be stated that there is no subsidy in the sense of Art. 18 para. 2 lit. a MWSTG and thus no input tax reduction is indicated in accordance with Art. 33 para. 2 MWSTG. Dismissal of the appeal of the FTA.
- Judgment of December 7, 2022 (2C_259/2022) - intended for publication: Staats- und Gemeindesteuern 2017 (Aargau); What was in dispute and to be examined was whether the transfer of the Pillar 3a contribution on December 29, 2017 (day of debiting) by the self-employed taxpayer was still in time to claim a corresponding tax deduction. As a result of the intervening Sundays and holidays, the pension fund was not credited until January 3, 2018. According to the Federal Supreme Court, Pillar 3a contributions are systematically private living expenses and not expenses that can be deducted from income in the financial statements. Accordingly, the rules on the accrual of expenses with regard to the preparation of the financial statements are not relevant for the determination of taxable income. By interpreting the relevant norms, the Federal Supreme Court concludes that the date to be taken into account is the date of the credit entry and not the date of the debit entry at the taxpayer. The same already follows from the regulation on the obligation to certify contributions made. Dismissal of the taxpayer's appeal.
- Judgment of November 25, 2022 (2C_81/2022, 2C_102/2022): Direct federal tax and cantonal and communal taxes 2007-2011 (Vaud); unification of proceedings; the subject matter of the dispute concerns the back taxes for the tax periods 2007 to 2009 as well as the fines for attempted tax evasion for the tax periods 2010 and 2011 (cf. on this also already the judgment of July 8, 2021 (2C_116/2021) as well as our contribution of July 25, 2021). The requirements for a subsequent taxation were met in the present case. By confirming a fine amount that was set at two thirds of the evaded tax, the lower court did not violate federal law (Art. 176 para. 2 DBG). The appeal of the StV/VD proves to be well-founded. The appealed judgment is set aside insofar as it relates to the back taxes for 2007-2009. The objection decision of the cantonal administration of May 12, 2020 is confirmed insofar as it relates to the additional taxes 2007-2009. Dismissal of the taxpayer's appeal.
- Judgment of December 7, 2022 (2C_524/2022): Direct federal tax and cantonal and communal taxes 2017 (Geneva); advance on costs; it is not arbitrary that the lower courts did not hear the appeals due to late payment of the advance on costs. Dismissal of the taxpayer's appeal.
- Judgment of 15 November 2022 (2C_392/2022): VAT 2011-2015; If the written acknowledgement or the unconditional payment concerns only a part of the amount listed in the notice of assessment, the tax claim becomes final or expires in the amount of this amount; dismissal of the taxpayer's appeal.
Decisions on non-admission and write-offs:
Decisions are listed chronologically by publication date.
Addendum: In the ruling of November 15, 2022 (2C_392/2022), which was listed in the last newsletter of December 21, 2022, the complaint was filed by the FTA (and not by the taxpayers, as erroneously stated).