Decisions of the Swiss Federal Administrative Court (CW 29 - 2024)

Overview of the tax rulings of the Swiss Federal Administrative Court published between July 15 - 21, 2024:

Judgment of July 4, 2024 (A-4978/2022): VAT; telecommunications and electronic services 2013-2017; in dispute is the mandatory tax liability of A Ltd, domiciled in Malta, which is active in the field of online sports betting. Contrary to the opinion of A Ltd, the offering of sports bets does not constitute maintenance services within the meaning of Art. 8 para. 2 lit. c VAT Act (place of supply at the place of activity abroad) due to the lack of presentation to the public. This is not affected by the fact that the bet relates to a sporting event that is performed in front of an audience. In the absence of proof, the services are subject to the place of supply principle pursuant to Art. 8 para. 1 MWSTG. Furthermore, the qualification as electronic services is disputed. According to the FAC, the human intervention is primarily limited to pricing (setting the betting odds) as a preparatory act, but the actual betting service is provided automatically. As the other requirements are met, this is an electronic service. The tax exemption pursuant to Art. 21 para. 2 no. 23 MWSTG does not apply, as the turnover of A Ltd is not subject to any special tax in Switzerland and is not used for charitable purposes. Due to the provision of electronic services in a B2C relationship and exceeding the turnover threshold, A Ltd must be retroactively entered in the VAT register and VAT on taxable supplies must be paid retrospectively. Appeal by A Ltd upheld only with regard to the 2013 tax period, which is absolutely time-barred, otherwise dismissed.
Judgment of July 3, 2024 (A-204/2023): VAT; supply tax 2014-2017; in particular, it was disputed whether the services to be assessed were provided to the Swiss branch of a foreign company (A. SA in State A) or to a permanent establishment located in another state (State B). The complainant (the Swiss branch) or A. SA operates an online platform for the procurement of business partners (B2B) in the field of recycling services. According to the complainant, the operation of the platform (including call center, customer service and IT department) took place in a permanent establishment in State B, specifically in the premises of B. Sàrl. B. Sàrl was commissioned by A. SA to provide various services in connection with the operation of the platform and a call center. Contrary to the opinion and presentation of the complainant, no permanent establishment of the Swiss branch of A. SA is established at the registered office of B. Sàrl, which would be regarded as the service recipient of B. Sàrl. Rather, the recipient of the services is the branch itself, which means that the purchase tax is due on the disputed services and was rightly claimed by the FTA. Dismissal of the complainant's appeal.
Judgment of July 11, 2024 (A-938/2023): VAT; interest on refunds 2010-2019; in this case, the files show that the FTA refunded VAT in the amount of CHF 422,315.15 to the complainant. There was no agreement on the amount of refund interest owed by the lower instance and when the refund interest period begins. The 60-day period, after the expiry of which interest on the refund is owed, begins with the submission of a written refund application to the FTA. Interest therefore begins to accrue from the 61st day after the taxable person has asserted or submitted a written refund application. Contrary to the complainant, the date of payment calculated according to the average expiry date or the date of the incorrect statement of account are therefore not relevant for the start of the refund interest period; dismissal of the taxpayer's complaint.

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