Decisions of the Swiss Federal Administrative Court (CW 3 - 2023)

Overview of tax law decisions of the Swiss Federal Administrative Court published between January 16 - 23, 2023:

Judgment of 20 December 2022 (A-4111/2021): Customs and VAT (subsequent claim for import duties); A cargo ship sailing under the Dutch flag was temporarily stationed in Basel and, according to the customs office, was used for events such as exhibitions, theater performances, etc. in the process. The dispute was whether the complainants had to pay import duties. In this context, it was relevant whether the ship in dispute qualifies as a duty-exempt Rhine ship. For this, the procedural formality of the self-assessment principle applicable under customs law requires the existence of the Rhine Vessel Certificate of Ownership (RZU) as a formal document, which the disputed vessel did not have in 2017, at the time of importation into Switzerland. A retroactive effect of the RZU issued by the Dutch authorities with validity as of 30 July 2020 does not result from the Mannheim Act and its additional protocols, nor from the relevant documents. The appeal of the taxpayer is dismissed.
Judgment of 22 November 2022 (A-1876/2021): Customs; subsequent claim for customs duties and import tax; The complainant is to be included in the wide circle of customs debtors, namely as a (legal) person who helped to arrange the import of the goods (principal). If the goods are already in Switzerland at the time of the order, the general willingness of the person concerned to take delivery of these goods means that the importation of the goods is partly caused by him. The complainant therefore belongs to the group of customs debtors and is jointly and severally liable. The Federal Administrative Court states that it was established that no duties were levied on the 1,329.45 kg of foodstuffs received, which means that the complainant accepted imported goods that had not been cleared through customs. The fact that the complainant claims not to have known about the fact that the goods were not duty paid is irrelevant. The appeal is dismissed.
Judgment of 22 November 2022 (A-1875/2021): Customs duties and VAT (subsequent claim of import duties); In the period from 2016 to 2017, a sole proprietorship imported cheese and butchery meat products from Italy into Switzerland without customs declaration and without import tax. Complainant A Sàrl ordered the Italian specialties directly from the sole proprietorship and settled their invoices without customs duty and import tax. What was in dispute was A Sàrl's duty to pay duty. If the goods are already in Switzerland at the time of the order, the general willingness of the person concerned to take delivery of the goods implies that they are imported by him. This broad regulation on the duty of payment is in the public interest to guarantee the collectability of the customs duties owed. Recourse among joint and several debtors is governed by civil law. By accepting imported and non-duty-paid goods, the complainant has gained an unlawful advantage based on an objective violation of administrative legislation. Dismissal of the complaint of the duty payers.
Judgment of 22 November 2022 (A-1872/2021): Customs duties and VAT (subsequent claim of import duties): The complainant A AG ordered duty unpaid goods from Italy via F Sàrl from a Swiss sole proprietorship, whereupon the FCA ordered the payment of customs duty and VAT including interest on arrears. The complainant is liable to customs duty as the principal who arranged for the import of the goods. Even if the goods are already in Switzerland at the time of the order, the general willingness of the person in question to take delivery of these goods means that they are also imported by him. Dismissal of the appeal of the person liable for duty.
Judgment of 14 December 2022 (A-1074/2022): Remission (customs, VAT); remission of import duties after procedural omissions of the contracted forwarding company. The fact that, according to the taxpayer, around 90% of the shipments were properly cleared by the contracted forwarding company cannot be to its advantage. This is because "extrapolating" the declaration or the actual customs clearance of a part of a customs consignment to further customs consignments is not capable of fulfilling the legal duties of due diligence to be observed for every introduction of goods into the customs territory when making the customs declaration. A "merciful" remission or refund beyond the cases regulated by law cannot be considered in view of the limited number of possible grounds for remission or refund specified by law. Dismissal of the complaint.
Judgment of December 15, 2022 (A-3116/2022): The taxpayer does not question the "legal legitimacy of this tax" with regard to the corporate tax it has to pay. On the contrary, he is concerned with what he considers to be the unsatisfactory program of those media which benefit from the corporate levy. For this reason, he considers the corporate levy he demands to be inadmissible. On the question of the legal basis for the calculation of the corporate levy demanded by the lower court, in particular on the earlier criticism by the Federal Administrative Court of the excessively coarse tariff structure pursuant to aArt. 67b para. 2 RTVV, the levy payer accordingly does not comment. According to the version in force since January 1, 2021, Art. 67b Para. 2 RTVO now provides for a total of 18 tariff levels. This new regulation obviously takes into account the earlier recommendations of the Federal Administrative Court. For this reason, and in particular in the absence of corresponding objections by the party liable for the levy, there is no reason in the present case for a (renewed) detailed examination of Art. 67b Para. 2 RTVO by the Federal Administrative Court. Thus, in casu, the legal basis for the assessment of the corporate levy (rate structure) is to be considered lawful. For the obligation to pay the company levy as a tax or for its amount, the only decisive factors are the VAT liability of the company in question and the amount of its turnover in the tax period concluded in the previous calendar year. There are no further legal requirements for the mandatory corporate levy. Dismissal of the appeal.
Judgment of 27 December 2022 (A-3906/2021): MVA (2015 - 2018): The complainant A AG was granted a building right by B with a duration until December 31, 2055. On June 18, 2015, A AG and B agreed to terminate the building right irrevocably on March 31, 2017. The parties agreed on a lump sum repurchase compensation of CHF 6.3 million including VAT, which A AG invoiced to B on July 1, 2015 and July 14, 2015. On both partial invoices A AG indicated a VAT rate of 8%. On December 11, 2015, the parties had a notary public certify that the transfer of the real estate (redemption of the easement and return of the buildings) was effected by way of a VAT-exempt sale. A VAT audit revealed that A AG had issued invoices to B with VAT shown without declaring the corresponding VAT amounts in its statements. This led to a corresponding tax correction by the FTA. The complainant takes the position that it had retroactively waived the taxation option by signing the publicly notarized purchase agreement of December 11, 2015. The claim that the public deed would have corrected the invoices is rejected by the SNB. A retroactive waiver of the option is not supported by case law. Also, the complainant cannot correct the invoices as 'incorrect tax display, since it was entitled to the option, and thus to display the 8% VAT on the invoices. Dismissal of the complaint of the taxpayer.
Judgment of 22 December 2022 (A-5139/2021): Post-clearance collection of import duties; The complainant with joint and several liability had to suspect the illegal activities of the meat supplier in the present case and could be expected to take precautionary measures and demand proof of customs clearances from the supplier; all the more so as he knew of the foreign origin of the goods and had at least expressed his general willingness to accept them. Thus, by his actions, the complainant induced a third party to deliver to him goods that he knew, or at least had to assume, were abroad before they had to be imported for delivery. Thus, he meets the requirements to be considered a debtor with respect to the imported goods. In the present case, it is true that the complainant is employed by the ordering company and does not have any signature authority registered in the Commercial Register. However, he had the necessary and sufficient authority to initiate imports of goods on behalf of the company and he could make these decisions independently. In this sense, the complainant cannot be considered an employee of the company who would have merely carried out the orders of a governing body or another employee to whom he would have been subordinate. In any case, the civil law position of the complainant is not relevant. From the point of view of customs law, the decisive factor is that the complainant actually caused the goods to be imported. There is no room for taking into account the economic capacity of the person liable to pay duty. Dismissal of the appeal.