Overview of the tax law decisions of the Zurich Tax Appeal Court published in September 2017.

  • Judgement of 28 June 2017 (ST.2016.82): State and municipal taxes 2013; spouse taxation and international tax segregation at the end of tax liability due to the sale of a property located in the canton of Zurich (commercial building). If only the wife has an economic affiliation to the Canton of Zurich and both spouses live abroad in a legally and factually unseparated marriage, only the wife is taxable in the Canton. The tax rate is based on the total married income and assets, applying the married tariff and the social security deductions for married couples. The tax value of the property is to be taken into account up to and including the date of sale of the property. In contrast, the proceeds to be paid at the same time - step by step - are not to be taken into account in determining the rate. The tax authority is authorised to set the property tax value at 70% of the purchase price paid if it is far below the 70% threshold. There is no right to equal treatment in the case of a failure to correct the property tax value of the sister of the obligor.
  • Judgement of 8 August 2017 (ST.2017.50): State and municipal taxes 2013; the tax office has rightly valued the 15% participation of the obligor in a company in the trust sector (in which he is also a partner) for wealth tax purposes according to the relevant directive or the practitioner method. The change of ownership of the same shares among the partners used by the obligor for the valuation is in the context of the shareholders' agreement; the price paid in this case was not paid by an independent third party and does not provide any better insight into the market value. This decision is not yet legally binding.
  • Judgement of 22 August 2017 DB.2017.5, ST.2017.6: Direct federal taxes 2014 and state and municipal taxes 2014; medical expenses; the obligated person could not prove that the medical expenses declared in the 2014 tax return for 72 sessions with a psychologist were based on a medical necessity There is no medical prescription 2014; the fact that the obligated person had medically indicated psychotherapeutic support for 10 years after an acute phase of illness as of 2002 does not change this. The present decision, which in particular also takes into account health law aspects, therefore confirms the offsetting of medical costs at the lower court. This decision is not yet legally binding.
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