Overview of the tax rulings of the Swiss Federal Supreme Court published between December 18 - 31, 2023:
- Judgment of November 22, 2023 (9C_639/2022): Cantonal and communal taxes 2013-2015 (Ticino); A. AG (taxpayer), which is active in the fundraising sector, has its registered office in the Canton of Zurich. It was disputed whether the taxpayer had a permanent establishment in the cantons of Ticino and Vaud, which the Canton of Zurich denied, the Federal Supreme Court denied in view of the locally rented premises from which the local campaigns and activities of "dialogers" on public property were managed.
- Judgment of December 4 (9C_681/2023): Withholding tax 2012; The appellant A. AG is active in the field of asset management, in particular with regard to real estate and its financing. The FTA opened administrative criminal proceedings against B (delegate of the board of directors). The ASU's investigation report revealed that B had occupied a property owned by A. AG from July 2010 to May 2012 without paying rent. A. AG had also booked renovation work amounting to CHF 54,000 by D. AG, for which B was also an officer. However, due to the lack of booking of expenses for personnel or external work, the FTA - like the Federal Supreme Court - did not assume that the renovation work had actually been carried out by D. AG. The FTA levied the withholding tax on the basis of the pecuniary benefits of A. AG. The arguments put forward against this with reference to Art. 6 ECHR are in vain, as Art. 6 ECHR does not apply from the outset in administrative proceedings. The arguments regarding the statute of limitations, which in this case is governed by 12 para. 4 VStrR, are also unsuccessful. Dismissal of the taxpayer's appeal in the simplified procedure.
- Judgment of November 30, 2023 (9C_667/2023, 9C_668/2023, 9C_669/2023): Cantonal and communal taxes and direct federal tax 2008-2011 and 2013-2016 (Vaud); the alleged violations of the right to be heard in connection with proceedings on hidden profit distributions must all be rejected. Dismissal of the taxpayers' appeal.
- Judgment of November 30, 2023 (9C_502/2023): State and communal taxes Zug; In this case, the taxpayer essentially lacked the interest worthy of protection for the issuance of a declaratory ruling by the cantonal tax administration Zug regarding the valuation of shares. Dismissal of the taxpayer's appeal.
- Judgment of December 6, 2023 (9CC_582/2023): Cantonal and communal taxes and direct federal tax 2008-2010 (Vaud); various non-cash benefits were offset against the AG held by the taxpayers, which were then also recognized as capital gains by the taxpayers. The objections raised against this (including the plea of the statute of limitations) were unsuccessful. Dismissal of the taxpayers' appeal.
- Judgment of December 7, 2023 (9C_682/2023): Direct federal tax 2011 and 2012 (Thurgau); The main issue in dispute and to be examined is the application of Art. 37b para. 1 sentence 1 DBG. In an earlier decision, the Federal Supreme Court determined the completion of the liquidation based on the sale of the three parcels of land, which were sold by means of a purchase agreement dated August 2, 2012 (judgment 2C_390/2020 of August 5, 2021, see also our article of August 29, 2021). Contrary to the opinion of the two cantonal court authorities, this should not play a role in the taxpayers' opinion, as the 2010 tax period was to be assessed at the time, while the two subsequent periods are now at issue. The question therefore arises as to whether the ruling 2C_390/2020 of August 5, 2021 has the consequence that a res iudicata also exists with regard to the 2011 and 2012 tax periods, limited in terms of content to the question of the conclusion of the liquidation phase. The concept of Art. 37b para. 1 sentence 1 DBG is that two financial years are to be treated in the same way. Therefore, a partial extension of legal force applies. The res judicata effect is now not limited to the 2010 tax period, but also to those tax periods which, according to the Federal Supreme Court's assessment at the time, are to be regarded as the last two financial years, i.e. 2011 and 2012. Dismissal of the taxpaying spouses' appeal.
- Judgment of November 23, 2023 (9C_734/2022, 9C_735/2022): Direct federal tax and state and municipal taxes 2016 (Basel-Landschaft); The present case concerns the offsetting of undeclared loan interest from the now liquidated B AG to the taxpayer A. The offsetting is undisputed for half of the total loan interest of around CHF 100,000. For the other half, A essentially claims that this is not attributable to him, but to the third party C. A can prove the payment to C, but A had paid the entire loan to B AG. The main dispute in the proceedings is whether the tax authorities have succeeded in providing (main) evidence that the second tranche is attributable to the taxpayer or whether the taxpayer has provided tax-reducing counter-evidence. The Federal Supreme Court came to the conclusion that the lower court was allowed to arbitrarily determine that the tax administration had succeeded in providing the main evidence regarding the attribution of the total interest payments based on various indications, such as accounting documents showing that the same amount of interest was paid to all lenders, and that the counter-evidence provided by the taxpayer had failed. The taxpayer also failed to demonstrate the unclear circumstances surrounding the loans granted to the borrower, which he presided over and liquidated, despite repeated requests from the lower courts. The taxpayer's submissions cannot dismiss the considerations on the assessment of evidence as untenable: It is true that the taxpayer can demonstrate that he only received one loan tranche (recte: interest tranche) and that the payment of the second loan tranche (recte: interest tranche) was made to C. However, he cannot deduce from this that, contrary to the tax administration's statements, he is not to be regarded as the beneficiary of the second loan tranche (recte: interest tranche), which was therefore attributed to him for income tax purposes. Dismissal of the taxpayer's appeal.
- Judgment of December 6, 2023 (9C_675/2023): VAT 2013-2016, appeal against the judgment of the Federal Administrative Court of September 13, 2023 regarding offsetting of rental fee for privately used vehicle (see our blog post of October 1, 2023); dismissal of the taxpayer's appeal.
- Judgment of December 4, 2023 (9C_688/2023): Cantonal and communal taxes 2008 (Geneva); This case concerns the admissibility of the extension of a supplementary tax procedure against the taxpayer, which initially only concerned income tax, but was also extended to include wealth tax in the course of the procedure. The additional taxes relating to income tax, which are based on several monetary benefits identified in the course of an ASU investigation, are undisputed. It is also undisputed that these non-cash benefits and fictitious bookings of the company influenced its taxable value. Rather, it is disputed whether the taxpayer was duly notified of the extension of the post-tax proceedings. The Federal Supreme Court considers the notification by means of a simple signed letter from the Geneva tax authorities to be legally sufficient. The taxpayer's right to be heard on the extension of the proceedings to the disputed assets was fully respected, as the tax authorities also explained in detail by e-mail the basis on which the supplementary tax was calculated and why the conditions for supplementary tax proceedings were met. The taxpayer's further argument that no subsequent tax proceedings can be opened for pure valuation issues is also invalid. Although in the present case the valuation of the securities is indeed at issue for wealth tax purposes, the original valuation was based on financial statements with massive fictitious expenses, which is why it is not the actual valuation mechanism that is being corrected, but the underlying facts. Therefore, a simple valuation difference that excludes a night tax cannot be assumed in the present case. Dismissal of the taxpayer's appeal.
- Judgment of December 11, 2023 (9C_709/2023): Cantonal and communal taxes and direct federal tax 2008-2015 (Geneva); securing; Contrary to the considerations of the lower court, the taxpayer did not assert the request for recusal against a judge of the decision-making body out of time, as he could not have expected him to be called upon when filing the appeal given the number of existing judges of the lower court. From a material point of view, however, the mere fact that the judge in question was Director General of the Tax Administration for part of the tax periods in question (prior to the start of the limitation period) does not constitute grounds for recusal. Dismissal of the taxpayer's appeal.
- Judgments of December 14, 2023 (9C_665/2022; 9C_666/2022): Staats- und Gemeindesteuern und direkte Bundessteuer 2008 (Zurich); The dispute is whether the lower court was right to affirm the requirement of seller participation in the sale of the shares of D. AG by the taxpayer and therefore assumed taxable capital gains in the context of an indirect partial liquidation in the post-tax proceedings. In order to exclude the allegation of participation, the seller must check whether the buyer is able to finance the purchase price from its own resources without recourse to the target company's funds. The criterion of the creditworthiness check is a duty of care on the part of the seller. In summary, the lower court stated that the obligation to cooperate could also be fulfilled in the case of a financially strong buyer company and that a distribution of assets could be expected in the case of an economically strong buyer if, at the time of the sale, there was a large amount of non-operating assets that were disproportionate to the operating requirements of the purchased company for the foreseeable future, which was the case here. As a result, it can be seen that, in view of the case law, the argumentation of the lower court with regard to the subjective element of passive participation of the seller as taxpayer is not objectionable. Dismissal of the taxpayer's appeal.
- Judgment of November 29, 2023 (9C_490/2023): State and municipal taxes and direct federal tax 2011-2017 (Zurich); free administration of justice; approval of the taxpayer's appeal and referral back to the lower instance for reassessment of the application.
Decisions on non-admission and write-offs:
Decisions are listed chronologically by publication date.
