Overview of tax law decisions of the Swiss Federal Administrative Court published between December 5 - 11, 2022:

  • Judgment of 17 November 2022 (A-1399/2020): Customs duties; outward processing with equivalent traffic (export of potatoes - import of potato chips); In dispute was the requirement of the BAZG, according to which the export of the potatoes and the settlement must take place within an export period of 3 months since the import of the potato chips, provided that within the framework of an equivalent traffic the processed product is imported before the corresponding quantity of potatoes has been exported. The Federal Administrative Court concluded that the requirement was not reasonable in the present case. Appeal upheld.
  • Judgment of 24 November 2022 (A-2706/2020): Refund of tax due to re-export; Ms. A. and Mr. B. are art collectors. In 2016, they acquired the work X from the company C. in New York. The work was to be included in their collection in Switzerland and was imported in 2016 by the forwarding agent, who completed the customs formalities at the customs office. The import tax was duly paid. The expert hired by the complainants doubted the authenticity and the origin of the painting and estimated its value at less than one-twentieth of the purchase price. The complainants called in two other experts, who stated that in particular the poor preservation of the work did not allow for certainty and that its value had been overestimated. After discussions between the parties, it was agreed to further analyze the work at C.'s premises in New York. The work was therefore exported in 2019 via the forwarder under the temporary export procedure. Later in 2019, the forwarder submitted a corrected export declaration to the customs office, accompanied by a commercial invoice marked "Return to seller." Subsequently, the complainants filed a VAT refund claim based on re-exportation, which was denied. The painting could be freely exhibited and viewed by the complainants for three years, a not insignificant period of time - which is essentially the use of a work of art. The criticism expressed by the experts did not hinder the use of the painting, since the complainants retained free disposal of it, i.e., were free to enjoy it. It follows that the painting was used by the complainants within the meaning of Art. 60(1)(a) VAT Act. In the present case, it must be stated with the lower court that the submitted documents do not prove in any way that the sale would have been cancelled. From the exchange between the complainants and the company C. it is at most evident that the latter offered to resell the painting and waived its commission in return. Since the cancellation of the supply within the meaning of Art. 60(1)(b) VAT Act implies a return to the original situation - i.e. a return of the object and a refund of the price, the present situation cannot be equated with it; in fact, the original exchange of services remains valid, since the discussions between the parties to the purchase contract have as their object the conclusion of a new contract. Dismissal of the appeal.
  • Judgment of 24 November 2022 (A-4119/2021): Customs duties, VAT; The disputed goods, which were imported by the taxpayer to her secondary residence in Switzerland but were not re-exported by her when leaving Switzerland, cannot be qualified as personal effects. A corresponding tax exemption does not apply. Dismissal of the appeal.
  • Judgment of 21 November 2022 (A-5088/2020): VAT 2005 - 2009, input tax deduction, aircraft; The VAT group (A-D) was not able to prove the business justification of disputed flights of the owner E, who had no management function or employment relationship, which is why the input tax was rightly reduced. Furthermore, the sale (in 2009) of an aircraft (purchased in 2006) constitutes a withdrawal, as it was used for a non-business purpose and transferred to the private assets of owner E as early as 2007: The revocable trust, which was founded by the owner E himself and not his sole proprietorship B, acted as seller. From the fact that upon the death of the settlor the revocable trust becomes an irrevocable trust, it is clear that only natural persons can establish a revocable trust. Therefore, the sale is not attributable to the Complainant, which is why the Complainant is not entitled to contribution relief. Dismissal of the taxpayer's appeal.

Decisions in the area of administrative assistance (incl. republications / updates regarding further appeal):

Decisions are listed chronologically by publication date.