Overview of the tax law decisions of the Swiss Federal Supreme Court published in the week from 11 to 17 February 2019.

  • Judgment of 16 January 2019 (2C_77/2017): Cantonal and Municipal Taxes 2005 (Aargau); § 29 para. 1 lit. b StG/AG and Art. 20 para. 1 lit. b DBG stipulate for bonds with predominantly one-time interest that payments by third parties in excess of the invested capital sum (namely the accrued interest received as part of the proceeds of the sale) are part of the taxable investment income, i.e. do not remain tax-free as private capital gains. In the case of other bonds, loans, claims from bank and savings deposits and other credit balances within the meaning of § 29 para. 1 lit. a StG/AG and Art. 20 para. 1 lit. a DBG, the prevailing doctrine is that the subjective principle of origin (link to the person providing the service) applies, i.e. all payments made by the debtor are recorded for tax purposes by the creditor as income from assets if and insofar as they relate to the capital debt but do not lead to its redemption (E. 4.3.2.). The capital contribution at issue in the present case fulfils the elements of a bond within the meaning of Sec. 29 para. 1 lit. a and lit. b StG/AG and Art. 20 para. 1 lit. a and lit. b DBG, which is why the capital gain from the conversion of the loan qualifies as interest from credit balances within the meaning of Sec. 29 para. 1 lit. a StG/AG and is subject to income tax as income from assets. In view of the lack of independence of the present conversion right, the addition of assets cannot be divided into a taxable interest and a tax-free capital gains component (E. 4.5.3.). The assessment of the lower court proves to be in conformity with the Tax Harmonisation Act (StHG). The appeal proves to be unfounded and is dismissed.
  • Judgment of 31 January 2019 (2C_1129/2018): Direct federal tax and cantonal and communal tax 2009 and 2010 (Vaud); the complainant denies in vain that he signed a ruling concerning the taxation of his employee shares. He also contests the result of an after-tax procedure including fines in connection with the taxation of these employee shares. Dismissal of the appellant's appeal in so far as it is upheld.
  • Judgment of 24 January 2019 (2C_347/2018): Real estate gains tax 2014 (Aargau); tax deferral in the sense of Art. 12 para. 3 lit. e StHG; the refusal to grant tax deferral in the present case cannot be based on the opinion of the lower court that the seller must have been resident in the sold property until the end of the period of ownership; this opinion of the administrative court does not correspond to the case law in such an absolute form. Rather, it states that the apartment must have been self-occupied at the time when the decision to replace it is taken. Unless the apartment is sublet, it is not harmful if the person concerned moves out some time before the sale (E. 2.3. et seq.). However, the Federal Supreme Court is bound by the findings of fact at the lower court, according to which the (temporary) residence in W. was not connected with the fact that the new home was not yet ready for occupation or that a rented apartment had to be moved into at or near a new place of work until the replacement property was ready for occupation. On the basis of this and other circumstances (continued use as a second home after this type of use was already the main focus of the case), the lower court concludes that under the specific circumstances of the individual case the conditions for a replacement purchase are not met and the tax deferral is therefore refused. The appeal is dismissed.
  • Judgment of 29 January 2019 (2C_65/2019): State and municipal taxes 2014 (Aargau); Discretionary assessment; the complainant's objections to the assessment order remain superficial and are not capable of presenting the derivation of the annual profit and the discretionary supplement as constitutionally untenable; the complaint proves to be unfounded and is dismissed.
  • Judgment of 31 January 2019 (2C_843/2016, 2C_844/2016): Direct federal tax and state and municipal taxes 2013 (Solothurn); determination of imputed rental value in the canton of Solothurn for the purposes of direct federal tax. Application of a 20% surcharge for a single-family house. § Article 9(2) StV/SO states that the guidelines issued by the Federal Tax Administration for determining the rental value of owner-occupied residential property are applicable in addition. The circular letter of 25 March 1969 concerning the determination of the taxable rental income of residential properties foresaw a corresponding surcharge, but was cancelled at the end of 2009. With regard to the tax period 2013, the assessment of which is at issue here, the question arises whether the circular letter is still applicable. In other words, the question arises whether the reference in § 9(2) StV/SO is static or dynamic. According to the Federal Supreme Court, this is a static reference, which means that the circular letter is still applicable by reference. If one were to conclude that there was a dynamic reference, this would lead to undertaxation (i.e. less than 60% of the market value) in the specific case. Approval of the appeal by the tax office of the canton of Solothurn.
  • Judgment of 30 January 2019 (2C_631/2017): Direct Federal Tax 2007 (Zug); the subject matter of the present proceedings concerns the question whether the complainant acted as a trustee for its then parent company in the 2007 tax period and whether the capital gains achieved are therefore taxable by the parent company; In the present case, the fiduciary relationship does not meet the requirements set out in the FTA information sheet concerning the establishment of a fiduciary relationship; the appellant is also unable to prove the fiduciary relationship in any other way, which is why the previous instance was right to refuse recognition for tax purposes and offset the capital gains achieved with the appellant. The appeal is dismissed.
  • Judgment of 30 January 2019 (2C_884/2018), scheduled for official publication Direct Federal Tax and State and Municipal Taxes 2008-2010 (St. Gallen); e-mails (last sent on 20 January 2011) from the mandated fiduciary office with the request that the 2008 assessment should still be awaited represent an "explicit recognition of the tax claim" within the meaning of Art. 120 para. 3 lit. b DBG and thus were able to interrupt the course of the limitation period of an assessment order. Likewise, a tax return that is completely filled out, signed by hand and submitted without reservation constitutes an express acknowledgement of tax liability. The plea of limitation proves to be unfounded for the 2008-2010 tax periods. The deductibility of the career path for a head of the curative education school was rightly limited to public transport, since it was not expressly disputed that the complainant did not own a motor vehicle and that the use of public transport was unreasonable for her. Dismissal of the appellant's appeal.

Non-occurrence decisions / inadmissible complaints:

Decisions are listed chronologically by publication date.

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