Decisions of the Swiss Federal Supreme CourtCW 9 - 2025)

Overview of the tax rulings of the Swiss Federal Supreme Court published between February 24 and March 2, 2025:

Judgment of February 3, 2025 (6B_90/2024): Withholding tax evasion in 2014; The Cantonal Court of the Canton of Vaud sentenced A. in the second instance to a fine of CHF 8,000 for contingent intentional evasion of withholding taxes in the amount of around CHF 200,000. The first instance had still acquitted A. The cantonal court was of the opinion that A., in his capacity as the person responsible for the accounting and tax system of B. AG, had at least possibly intentionally failed to report monetary benefits to the FTA for the 2014 financial year (see on the criminal liability of the consultant: judgment 6B_93/2024 of February 3, 2025). The main material dispute before the Federal Supreme Court was whether A. was aware of taxable pecuniary benefits consisting of the translated interest on a loan from a group company when the obligation to declare expired. The Federal Supreme Court upheld the assessment of the lower court, according to which A. - contrary to the opinion of the lower court - was well aware of the taxability of the benefits in view of the offsetting carried out by the cantonal tax office for profit tax purposes, which was based on a mutual agreement, as the offsetting took place before the expiry of the declaration deadline for withholding tax purposes. Dismissal of the complainant's appeal.
Judgment of February 3, 2025 (6B_93/2024): Withholding tax evasion 2014 (instigation); The Cantonal Court of the Canton of Vaud sentenced A. in the second instance to a fine of CHF 8,000 for instigating the evasion of withholding taxes in the amount of approximately CHF 200,000. As in the proceedings concerning the main offender (see judgment 6B_90/2024 of February 3, 2025), the taxable supply consisted of translated interest on intra-group loans. A. acted as a consultant for B. AG in this regard and drafted a memorandum on the tax risks associated with the interest. The cantonal court was of the opinion that in particular the memorandum and internal notes of B. SA, according to which the withholding tax was only to be paid in the event of an inspection by the FTA, would prove that A. had instigated the evasion of withholding tax. The Federal Supreme Court rejected this conclusion as obviously untenable and denied that the risk analysis could be read as a recommendation to do nothing with regard to withholding tax. Furthermore, it was not proven that the internal notes of B. AG were based on communications from A. Appeal of the complainant upheld.
Judgment of January 30, 2025 (9C_537/2024): Direct Federal Tax 2018 (Zurich); The dispute in this case is whether A qualifies as a commercial real estate trader. Based on an overall assessment, the Federal Supreme Court came to the conclusion that A's activities went beyond private asset management. The combination of high debt financing, professional expertise in the real estate sector, use of the property to obtain employment, systematic approach and profit orientation meant that the profit made was classified as income from self-employment and not as tax-free private capital gains. Dismissal of the appeal.
Judgment of February 11, 2025 (9C_689/2024): Administrative fees of the Canton of Valais; Contrary to the appellant, it is not apparent in what way it is arbitrary, contrary to good faith or otherwise unconstitutional for the lower and higher courts to charge costs for the decisions they make. Dismissal of the taxpayer's appeal.
Judgment of January 27, 2025 (9C_226/2024): Direct federal tax and cantonal and communal taxes 2011-2012 (Geneva); The taxpayer A. concluded an option agreement with F. Ltd., a subsidiary of B., where he was employed, on May 18, 2009. A. had the exclusive right to sell his shares to E. at a certain price (put option) while F. had the exclusive right to buy or repurchase the shares of E. held by the taxpayer as well as the shares he could acquire at a later date (call option). Contrary to the opinion of the lower court, A. did not acquire any employee options, but undertook to resell the shares held (or still to be acquired) to F. at the agreed conditions. The taxation at the time of the conclusion of the option agreement is incorrect, as A. did not have the economic power to dispose of the shares. The realization of the income took place at the time when the taxpayer resold the shares in 2012. In addition, A. committed attempted tax evasion as he did not declare the shares of E. in his tax return in 2011 and 2012. Dismissal of the appeal by the taxpayer A.
Judgment of January 30, 2025 (9C_206/2024): Direct federal tax and state and municipal taxes 2019 (Bern); Immediately after his divorce, the taxpayer made regular repurchases into the 2nd pillar to close his divorce-related pension gap and withdrew the assets in capital form upon his retirement in 2019. The tax authorities did not allow the last purchase in the year of retirement to be deducted due to tax avoidance. The Federal Supreme Court ruled against tax avoidance, as the repurchases were made immediately and regularly after the divorce. The fact that there were only a few months between the last purchase and the capital withdrawal would only be relevant if no or insignificant repurchases had been made in previous years (which was not the case here). The taxpayer's appeal was upheld.
Judgment of February 4, 2025 (9C_714/2023): Cantonal and communal taxes 2014-2019 (Bern); At issue in this case is the tax residence of an FDFA employee A., who worked abroad in various countries from 2014-2019 (on average around 9 months per year). The Federal Supreme Court ruled that residence for tax purposes is determined not only by physical presence, but above all by the totality of objective living circumstances. Although A. stayed abroad for longer periods, he regularly returned to Switzerland, where he had his residential address, maintained his social contacts and kept his professional base. His assignments abroad were always temporary, he did not build up any deep personal or social ties at the places of assignment and did not have a fixed residential situation there. Dismissal of the appeal.
Judgment of February 10, 2025 (9C_390/2024): State and municipal taxes 2021 (Lucerne); The dispute is whether the taxpayers should be granted the increased child deduction under cantonal law for their daughter who is in training as a farmer. In summary, no arbitrariness is evident in the contested judgment and the appellants have not raised any substantiated complaints. Dismissal of the taxpayers' appeal.