Decisions of the Swiss Federal Administrative Court (CW 20 - 2024)

Overview of the tax rulings of the Swiss Federal Administrative Court published between April 13 - 19, 2024:

Judgment of April 26, 2024 (A-4347/2022): VAT, supplies to closely related persons 2013-2017; in the present proceedings, the lower instance made a discretionary assessment on the basis of various undisputedly taxable purchases of materials and services by the appellant, which it claimed in connection with the redesign of the surroundings (including garden) of the private detached house, among other things. Due to the absolute limitation period that has now expired, the appeal is upheld to the extent of the disputed additional tax claim relating to the 2013 tax period. However, the other partial additional charges are deemed to be lawful. In the present case, the appellant is unable to prove the obvious incorrectness of the estimates made by the lower court. The appeal is partially upheld, but otherwise dismissed.
Judgment of April 17, 2024 (A-6860_2023): VAT 2009 and 2013-2014; supplies to closely related persons; Contrary to the taxpayer's view, it can be assumed that the Federal Supreme Court specifically had the activities of aircraft owner companies in mind with its case law pursuant to BGE 149 II 53. Accordingly, the argument that the provision of a vacation home by the taxpayer to closely related persons constitutes a non-entrepreneurial activity is not convincing. With regard to the remuneration assessed by the FTA in this regard by means of full cost accounting, the following is considered: If the FTA, with reference to BGer 2C_119/2017 (see our article of November 4, 2018), states that, in deviation from its published practice, it is not sufficient to tax the imputed rental value plus 25% in the case of an exclusive rental because this amount does not correspond to the market rental value, it is not convincing. After all, it can be considered generally accepted that long-term tenancies are significantly cheaper per unit of time rented than short-term tenancies. The FTA is therefore unable to substantiate why it deviates in this individual case from its practice in accordance with section 7.1.2 of MBI 17, which - like other administrative ordinances - should serve to ensure a uniform, consistent and correct practice of law enforcement and is in principle binding for the administration, unless it clearly contains unconstitutional or unlawful content, which is not the case here. The appeal was predominantly upheld.
Judgment of April 26, 2024 (A-5807/2023): VAT 1st semester 2022; provisional discretionary assessment; Whether payment facilitations pursuant to Art. 90 para. 1 MWSTG, which according to its wording only provides for the possibility of payment in installments with regard to the payment of tax, interest and costs, are also applicable to the payment of the provisional tax amount, can be left open in the present case. The conditions for granting payment in installments were obviously not met. In his application for payment in installments, the taxpayer did not demonstrate how the payment of the provisional tax amount would be associated with "considerable hardship" for him. Even if such a hardship had existed, this would not justify his failure to submit the VAT statement. By failing to submit the required VAT statement for the first semester of 2022 - as well as the VAT statements for various previous accounting periods - despite multiple requests and deadlines that had already expired, the taxpayer did not demonstrate a sufficient willingness to pay. The lower court therefore rightly held that the conditions for payment in installments were not met. In summary, the determination of a provisionally owed tax amount by the FTA and its enforcement proved to be permissible in the present case. Dismissal of the appeal.
Judgment of April 23, 2023 (A-860/2023): Subsequent collection of VAT 2013-2017; The estimate made by the FTA for the turnover of the various projects of the non-registered taxable person (civil engineer) is not objectionable. Most of the appeal dismissed.
Judgment of April 19, 2023 (A-861/2023): Subsequent collection of VAT 2012-2017; The estimate made by the FTA for the turnover of the various projects of the taxable person (architect) is not to be objected to or merely reduced to the extent of the correction made by the FTA in its response to the appeal. The appeal is predominantly dismissed.
Ruling of May 7, 2024 (A-1004-2023): VAT 2016-2017; The income from the managed care services provided by the VAT group is not exempt from VAT. The sales generated in the aforementioned tax years from medical massages performed at satellite locations are also not exempt from VAT. Dismissal of the appeal.

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