Decisions of the Swiss Federal Supreme Court (CW 7 - 2022)

Overview of the tax law decisions of the Swiss Federal Supreme Court published between 14 - 20 February 2022.

Judgment of 24 January 2022 (2C_551/2021): Value added tax; the taxpayer claims that its right to a fair hearing was violated by the Federal Administrative Court's failure to forward to it an opinion of the FTA. The Federal Supreme Court states that each party to the proceedings has the right to be informed of all statements submitted to the court by the opposing parties and to be able to comment on them. Furthermore, the letter of the FTA extends over three pages and sometimes expresses factual assumptions of the FTA that require a closer examination. A referral back to the lower court would therefore not lead to formalistic idleness. The taxpayer's appeal must be upheld.
Judgment of 26 January 2022 (2C_822/2021): Withholding tax; withholding tax evasion; the taxable company had an undeclared bank account. The account statements showed that the majority of the payments received were used privately by the shareholder (sole shareholder). Furthermore, the company had waived income by transferring a property owned by it to the shareholder and his wife at a rental price below the imputed rental value. The FTA considered this to be a benefit in kind and levied withholding tax on it plus interest on arrears. The taxpayer appealed to the Federal Supreme Court. In the present decision, the Federal Supreme Court deals in detail with the interplay between the FTA and the Criminal Code with regard to the limitation period for claims for subsequent payment of withholding tax. In casu, the Federal Supreme Court comes to the conclusion that the taxpayer is obliged to pay withholding tax in arrears pursuant to Art. 12 ITA and that these claims are not yet time-barred. Dismissal of the taxpayer's appeal.
Judgment of 27 December 2021 (2C_73/2021): Administrative assistance DTA CH-IT; In the present case, the Italian tax authority submitted a group request to the FTA relating to Italian taxpayers whose names are not known and who held one or more accounts with C. AG in the period from 23 February 2015 to 31 December 2016, had their domicile or residence address in Italy and received a letter from C. AG announcing the forced closure of the bank account. The complainants A. and B. took the view that the mutual agreement between Switzerland and Italy left no room for this. In the present case, the group request fulfils all three conditions. A mutual agreement cannot be more restrictive than the DTA CH-IT. The complainants fall into the pattern of behaviour described by the Italian tax authorities. According to the lower court's findings, the content of the letter to the complainants (threatening to restrict the use of the account) does not correspond exactly to the content of the request for administrative assistance (threatening to block the account). However, this element does not lead to their exclusion from the request for administrative assistance. Moreover, the complainants have closed their account. Dismissal of the taxpayers' appeal.
Ruling of 25 January 2022 (2C_725/2021): Cantonal tax 2013 (Ticino); The taxpayer took the position that a shareholding that the tax authority had attributed to his taxable assets was merely held in trust. The lower court's finding of fact that the taxpayer had not provided clear evidence of the existence of a fiduciary relationship is not manifestly incorrect. Dismissal of the taxpayer's appeal.
Judgment of 27 January 2022 (2C_894/2020): State and municipal taxes and direct federal tax 2007 (Vaud); at issue is whether a set-off against taxable profits was lawfully omitted. In the present case, it is clear from the contested judgment that the complainant authority relied before the cantonal court on various indications which, in its opinion, were intended to prove that the fees paid by the complainant company C. AG were made without consideration on the part of C. AG. This included B.'s shareholder relationship in both companies and doubts that the company had the capacity to provide the agreed service. The Cantonal Court denied the existence of a disproportion between the consideration of C. AG and the amount of the fee received solely on the grounds that this amount only represented a share of less than 10% of the 2007 turnover of the said company. However, this element was not in the case file. Thus, it would have to be examined whether the respondent's allegations to the contrary allowed the conclusion that the services in question were economically justified. Appeal of the Vaud Tax Administration upheld and referred back to the cantonal court.
Judgment of 1. February 2022 (2C_800/2021): Staats- und Gemeindesteuern 2018 (Wallis); What was in dispute in the present case was whether travel costs or, in part, public transport to the place of work could be used as professional expenses; In the present case, it is not sufficient in particular to assert in the abstract, contrary to the content of the employment contract, that external assignments require the use of a vehicle, all the less so if the taxpayer is not able to prove a single such assignment during the tax period under review; Dismissal of the taxpayer's appeal.
Ruling of 20 January 2022 (2C_664/2021): State and communal taxes 2009 (Aargau): lump-sum payment; Since the complainant had a cash payment made to him again shortly after the reimbursement of the wrongly withdrawn vested benefits and shortly thereafter wrongly, the capital withdrawn in 2009 was not returned to the pension purpose. The lower court was therefore correct in finding that the cash payment received by the complainant in 2009 should definitely be recorded for tax purposes in this period as other income, without the complainant having to be given another opportunity to make a refund. Dismissal of the taxpayer's appeal.
Judgment of 7 February 2022 (2C_705/2021): Development costs (Geneva); In the present case, in particular, no violation of the right to be heard or the right to judicial assessment; dismissal of the taxpayer's appeal.
Judgment of 9 February 2022 (2C_328/2021): Substitute tax for parking spaces (Valais); In the present case, in particular, no arbitrariness or violation of the principle of legality; Dismissal of the taxpayer's appeal.