Overview of the tax law decisions of the Swiss Federal Administrative Court published in the week from 14 to 20 October 2019.
- Judgment of 23 August 2019 (A-458/2017): withholding tax; cash value of services provided in tax periods 2006, 2007, 2008; tax evasion; infringement of the right to be heard; infringement of procedural rights; limitation of withholding tax. In the present case, the complainants are a company in liquidation which was active in foreign exchange transactions and had some exchange offices, and its main shareholder. In the summer of 2010, the FTA's Department of Criminal Matters and Investigations (ASU) conducted a special investigation against the complainants pursuant to Articles 190 et seq. of the EC Treaty. DBG. It was suspected that the company had only recorded part of its actual revenues and that the majority shareholder had collected cash benefits in the 2006, 2007 and 2008 tax periods. Based on seven confiscated booklets in which the main shareholder recorded the actual turnover generated in each financial year, the ASU confirmed in its final report the suspicion of the existence of monetary benefits in the form of hidden profit distributions to the main shareholder. The figures contained in the seven issues were higher than those actually recorded by the company. Consequently, the FTA ordered the company to be subject to withholding tax for the 2006, 2007 and 2008 tax periods, as these monetary benefits in the form of hidden profit distributions actually accrued to the main shareholder. The main shareholder must also be jointly and severally liable with the company for the withholding tax. The company and its main shareholder lodged an appeal with the Federal Administrative Court against this decision. They complained that all turnover was not collected from the main shareholder, but was used to repay the debt incurred in order to have sufficient liquidity to carry out foreign exchange transactions. They also pleaded infringement of the right to be heard and of procedural rights. The SNB confirmed the decision of the FTA and rejected all the complainants' complaints: both before the FTA and before the SNB, the complainants did not provide sufficient evidence that the turnover had been used to repay the debts incurred. Furthermore, the infringement of the right to be heard and of procedural rights is unrelated to the dispute at issue and is therefore irrelevant to the present proceedings. In addition, the BVGer examined the possible limitation of the withholding tax. Since this was a case of tax evasion, the 7-year limitation period, which has already been confirmed several times by case law and which was interrupted during the appeal proceedings before the FTA and the SNB, applies in this case. The BVGer thus found that the withholding tax was not time-barred. Rejection of the taxpayers' complaint. Decision contested before BGer.
- Judgment of 24 October 2018 (A-5232/2017): Value added tax (VAT); decision annulled by the BGer by judgment of 19 September 2019 (2C_1096/2018).
- Judgment of 24 October 2018 (A-5244/2017): VAT; decision confirmed by the BGer with judgment of 19.09.2019 (2C_1095/2018).
- Judgment of 11 September 2019 (A-5688/2015): Customs clearance; technical ethyl acetate; decision confirmed by BGer with judgment of 24 September 2019 (2C_950/2018); see our contribution of 13 October 2019.
- Judgment of 8 March 2014 (A-4913/2013): the Federal Supreme Court did not rule on the appeal by judgment of 18 March 2016 (2C_1067/2014, 2C_1077/2014).
Decisions of the Federal Administrative Court in the area of administrative assistance:
- Judgment of October 8, 2019 (A-5893/2017): Administrative assistance DTA Switzerland - France (FR); the appeal is dismissed.
- Judgment of 2 October 2019 (A-3762/20179): Administrative assistance DBA Switzerland - Russia (RU); the complaint is not acted upon.
- Judgment of 26 September 2019 (A-732/2019): Mutual assistance DBA Switzerland - Netherlands (NL); the complaint is not acted upon.
Decisions are listed chronologically by publication date.
