Decisions of the Swiss Federal Administrative Court (CW 9 - 2022)

Overview of the tax law decisions of the Swiss Federal Administrative Court published between 28 February - 6 March 2022.

Judgment of 14 January 2022 (A-3812/2021): VAT (2012-2016): appeal not upheld; In the present case, according to the "track and trace" of the Post Office, the decision of 7 May 2020, sent on the same day by A Mail Plus, was delivered to the P.O. Box on Friday 8 May 2020. It must be noted that the appellant does not succeed in proving to a certain degree of probability that the decision was not delivered to her on 8 May 2020. Consequently, the decision is final and the appeal of 19 February 2021, which was sent after the statutory period of 30 days from receipt, was out of time; dismissal of the appeal; decision appealed to the Federal Supreme Court.
Ruling of 29 March 2021 (A-2727/2019): VAT (Q1/2011-Q4/2015); The burden of proof that the place of provision of services is abroad (namely in the case of offshore companies) lies with the taxpayer, including law firms subject to professional secrecy. The taxpayer law firm did not provide this proof. Dismissal of the taxpayer's appeal; decision confirmed by the Federal Supreme Court.
BVGE 2021 III/3: Refund of VAT levied on importation; The interpretation of Art. 60 MWSTG in conjunction with Art. 11 ZG shows that the purpose of the refund provision is the restoration of the status prior to importation; The burden of proof for the prerequisite of the lack of domestic use lies with the person requesting the refund. The concept of "taking into use" does not necessarily presuppose a reduction in the value of the imported goods. Swiss law has its own concept of VAT; the meaning given to it by the legislator must not be twisted in the name of possible Euro compatibility.
Judgment of 18 November 2020 (A-2490/2020): and Judgment of 18 November 2020 (A-2495/2020): VAT; Performance between closely related persons (2010-2014); The remuneration between closely related persons must withstand the principle of third-party comparison. The rent paid in the present case did not correspond to the market price; the offset was in part too high; partial approval of the taxpayers' appeals; decisions confirmed by the Federal Supreme Court.
Ruling of 18 September 2020 (A-7028/2018): VAT; input tax deduction; sale of treasury shares (2012-2015); trading in treasury shares is considered a capital contribution under VAT law (non-remuneration pursuant to Art. 18 para. 2 subpara. e VAT Act) as long as the company does not systematically trade in treasury shares with the aim of generating income or profit (securities trading, turnover exempt from tax); appeal upheld; ruling confirmed by Federal Supreme Court.
Ruling of 15 June 2020 (A-6474/2018): Value added tax (VAT); teak tree investment (2013); In the present case, the Federal Administrative Court had to assess how the transactions described by the complainant as "tree sales" are to be qualified, namely whether they are not supplies subject to VAT but exempt transactions in the area of monetary and capital transactions. After a thorough review of the underlying contracts and contractual provisions, the Federal Administrative Court comes to the same conclusion as in the ruling of the Federal Administrative Court A-545/2012 of 14 February 2013, which also concerned the complainant (but earlier tax periods), according to which no economic power of disposal is granted to the customers and thus no supply is made pursuant to Art. 3(d)(1) VAT Act. The services provided by the complainant are exempt from tax and the corresponding input tax deduction (in connection with these services) is therefore excluded. Dismissal of the appeal; decision confirmed by the Federal Supreme Court.
Judgement of 8 February 2022 (A-553/2021): Value added tax (VAT); subjective tax liability, subsidy or remuneration; The qualification of the annual contributions of the city to the complainant in the amount of CHF 300,000, which were paid on the basis of the service agreement and the resulting subjective VAT liability, is in dispute. If the service contract gives the complainant a great deal of leeway in carrying out its work (promoting political education, for example by organising exhibitions), no specific consideration can be seen. The payment of an annual lump sum also indicates support for the complainant's activities, which means that there is no compensation for a specific service. For VAT purposes, the lump sum is therefore to be regarded as a subsidy (non-remuneration within the meaning of Art. 18 para. 2 lit. a VAT Act). If the complainant does not provide taxable services within the meaning of the VAT Act (only receives non-remuneration in the form of subsidies), there is no subjective VAT liability. Appeal upheld.
Ruling of 15 February 2022 (A-2686/2020): VAT (2011-2016); tax rate; combination of services or total service (Art. 19 VAT Act); During a VAT inspection, the FTA determined, among other things, that the advent calendars invoiced by the taxpayer at the reduced tax rate of 2.5 %, consisting of the calendar with 24 little doors behind which 24 muesli are "hidden", form a uniform, indivisible whole, are to be treated according to the character of a total service and are therefore to be taxed at the standard rate; in the present case, the statute of limitations has run with regard to the 2011 tax period, which is why the appeal is to be upheld in this respect. As the lower court rightly states, an empty advent calendar would no longer have the same significance as a calendar filled with muesli, as the typical element of surprise would no longer exist; the character of the individual service components would change in comparison to the service package; the purchase of the muesli for the consumer of a "muesli advent calendar" is not so dominant that all other service components are relegated to the background. Consequently, it cannot be said that the essence of the "müesli advent calendar" is the delivery of the müesli. All in all, the "Christmas printed cardboard calendar" with its surprise effect is in the foreground in this case. Partial approval of the taxpayer's complaint.

Decisions in the area of administrative assistance / non-admission:

Judgment of 11 November 2021 (A-5641/2020): Administrative assistance DTA CH-FR; Dismissal of the appeal; the Federal Supreme Court did not hear an appeal against this ruling.
Judgment of 11 November 2021 (A-5986/2020): Administrative assistance DTA CH-FR; Dismissal of the appeal; the Federal Supreme Court did not hear an appeal against this ruling.
Judgment of 11 November 2021 (A-5993/2020): Administrative assistance DTA CH-FR; Dismissal of the appeal; the Federal Supreme Court did not hear an appeal against this ruling.
Judgment of 11 November 2021 (A-5995/2020): Administrative assistance DTA CH-FR; Dismissal of the appeal; the Federal Supreme Court did not hear an appeal against this ruling.
Judgment of 10 September 2021 (A-2697/2019): Administrative assistance (DTA CH-IN); appeal dismissed; the Federal Supreme Court did not hear an appeal against this ruling.
Judgment of 13 August 2021 (A-5964/2019): Administrative assistance DTA CH-IN; appeal partially upheld; the Federal Supreme Court did not hear an appeal against this ruling.
Judgment of 15 February 2022 (A-5216/2021): Administrative assistance DTA CH-KR; dismissal of the appeal.
Judgment of 11 August 2021 (A-2772/2021): Administrative assistance DTA CH-FR; In the present proceedings, it was examined whether the requirements for a revision of the judgment A-1783/2019 are met and what the consequences of such a declaration of nullity would be. The court concludes that direct information of the person entitled to complain pursuant to Art. 14 para. 4 StAhiG was not lawful in the present case. Partial approval and adaptation of judgment A-1783/2019 of 19 May 2021; the Federal Supreme Court did not hear an appeal against this judgment.
BVGE 2021 III/2: International administrative assistance in tax matters under FATCA; The IRS may make group requests based on information that it has received in advance from the bank in aggregated form under the FATCA agreement. Such information is likely to be material per se. Compliance with the principle of subsidiarity is not necessary. A "fishing expedition" cannot be present.