Decisions of the Swiss Federal Administrative Court (CW 38 - 2021)

Overview of the tax law decisions of the Swiss Federal Administrative Court published in the week of 20 - 26 September 2021.

Judgment of 30 June 2021 (A-1121/2020): Stamp duty; issue duty; confirmation of the Federal Supreme Court's case law that for the transaction of a quasi-merger - taking into account the economic law approach - there must be a uniform act or a close factual connection. In the present case, the capital increase of the acquiring company (A AG) and the exchange of shares with the shareholders (B AG) of the acquired company (D. LLC) are not to be regarded as part of a uniform act, since (i) in a first step, the acquiring company (A AG) grants B AG participation rights in the acquired company (D. LLC) in exchange for a vendor loan. LLC) against a vendor loan and (ii) the acquiring company A AG only carried out a capital increase because it was unable to repay the vendor loan to B AG (payment of the capital increase by B AG by offsetting the loan). Accordingly, the capital increase of the acquiring company A AG had not been planned as a necessary step from the beginning according to the chosen and executed procedure, which is why there is no uniform action. The capital increase of the acquiring company A AG cannot therefore be carried out free of emissions levy. Dismissal of the appeal.
Ruling of 6 August 2021 (A-5196/2020): Value added tax; entity of the enterprise / services exempt from tax (tax periods 2012 to 2015); In the case at hand, it was disputed whether the turnover generated by therapists on the premises of a pharmacy is to be allocated to the pharmacy as a taxable entity under value added tax law. After a thorough review of the facts, the Federal Administrative Court found that there was a preponderance of evidence against the qualification of the therapists as independent VAT subjects. The complainant's tax liability also extended to the turnover generated by the individual therapists in the therapy centre. This was because the complainant's actions in relation to the therapy centre went far beyond those of a mere letting of business premises from the point of view of VAT law. The conditions for an exempt service were also not fulfilled in casu. Dismissal of the appeal; new appeal to the Federal Supreme Court.
Judgment of 8 September 2021 (A-479/2021): withholding tax 2011 and 2012 (collection); the FTA was correct in assuming a benefit in kind in connection with an underpriced house rental to the shareholder and in connection with an unrecorded bank account which, although legally and economically attributable to the taxpayer, was used primarily to pay private living expenses; a statute of limitations did not occur; dismissal of the appeal with the exception of a small item on bank fees charged.

Decisions in the field of administrative assistance: