Overview of the tax law decisions of the Swiss Federal Administrative Court published in the week of 18 - 24 May 2020.

  • Judgment of 6 May 2020 (A-5601/2019): VAT; transactions in precious metals (2011 - 2014); the appellant is part of an international group and carried out various transactions in precious metals. In various constellations, it received industrial and precious metal waste and forwarded it to a Group company for processing. The volume and stock of deliveries was (partly) credited to a (precious metal) account. Since the complainant has not been granted any economic power of disposal or right of use of the precious metals, there is no VAT-relevant exchange of services; acceptance of the taxpayer's complaint.
  • Judgement of 5 May 2020 (A-4544/2019; A-4545/2019): VAT; discretionary assessment (2009-2013); the method of assessment used by the FTA, i.e. to calculate turnover on the basis of the recorded purchase of goods and expenditure on outside work using empirical rates, is appropriate in the present case, as the taxpayer's accounts are denied evidential value due to various deficiencies and the taxpayer is unable to prove that the FTA's discretionary assessment method is incorrect. The taxpayers' complaint is upheld in that the FTA made a calculation error in the calculation of the turnover estimate. For the rest, the appeal is dismissed. ‍
  • Judgment of 29 April 2020 (A-1223/2019): Input tax correction; by renting a residential building (single-family house with barn), the appellant has, in principle, made a supply of goods or services which is exempt from VAT. However, she had not declared the service accordingly in the VAT statement and failed to provide evidence of the option. Nor is she able to prove that a business rental is involved. The option for rental properties used privately is excluded. As a result, input tax on renovation costs for the property cannot be claimed; rejection of the taxpayer's complaint.
  • Judgement of 12 March 2020 (A-5911/2019): VAT (2015; see our contribution of 22 March 2020); for the tax period 2015, a joint external appearance of the law firm is to be affirmed, whereby the complainant (as a former partner) can be sued personally for the outstanding taxes of the law firm; dismissal of the partner's appeal; decision appealed to the Federal Court of Justice.
  • Judgment of 9 March 2020 (A-460/2019): VAT; subsidy / input tax deduction reduction (cf. our contribution of 22 March 2020); the "endowment capital" of the taxable public-law institution qualifies as a subsidy or other public-law contribution within the meaning of Art. 18(2)(a) VAT Act and not as a capital contribution - with corresponding consequences for the input tax deduction, which is to be reduced by applying Art. 75(2) VAT Ordinance The same applies to a reduction granted to the establishment for a building lease charge. In this case, an input tax reduction in accordance with Art. 75 para. 3 MWSTV applies; rejection of the taxpayer's appeal; decision appealed to the Federal Supreme Court.
  • Judgment of 16 December 2020 (A-2204/2018): VAT (1 January 2010 to 31 December 2014); two different balance tax rates are correctly applied to taxable persons who sell textiles without further processing on the one hand and textiles on which embossing and screen printing work has been carried out on the other. In addition, in the case of invoices issued by the complainant for the sale of processed textiles, it is justified to apply to the whole amount the higher rate for processed textiles, since no distinction can be made between the price of the work on the one hand and that of the goods on the other. Rejection of the taxpayers' complaint; decision confirmed by the BGer (cf. our contribution of 17 May 2020).
  • Judgement of 15 May 2019 (A-6360/2017): Withholding tax on benefits in kind; interest on a participating loan not in line with market conditions; the interest rate of 7 % on a loan far exceeded the interest rates according to the circular (4.5 % and 3.75 %); the governing bodies must also have been aware that loans at more favourable conditions would have been available on the market; the discrepancy was clearly evident; the appeal is dismissed; decision confirmed by the Federal Supreme Court (see our contribution of 17 May 2020).
  • Judgement of 8 May 2020 (A-2286/2017): Withholding tax; monetary value benefit; No suspension of proceedings is appropriate in the present case (in particular acceleration of proceedings), even if criminal and administrative proceedings against the executive bodies are still pending in the present case; in particular reference to a judgement of the Federal Court (2C_382/2017), which concerned a different tax period (cf. our contribution of 20 January 2019), but can also be applied to the period in dispute and cannot be invalidated by the complainant despite new findings from the other proceedings; rejection of the taxpayers' complaint.

Decisions in the field of administrative assistance:

Decisions are listed chronologically by publication date.

Tax topics covered in this post:
Treaties
Value Added Tax (VAT)
International Tax
Transfer Pricing
Withholding Tax