Overview of the tax law decisions of the Zurich Tax Appeal Court published in November / December 2020.
- StRG ZH, 17 September 2020, DB.2019.197 / ST.2019.256: Subjective tax liability / abuse of agreement (this decision is final); The obligated party moved its registered office from the Canton of Zug to the Canton of Zurich. By means of preliminary tax assessments, she had both cantons confirm that she was to be taxed as a mixed company. Almost 15 years later, the obligor claims that it has no business activity in Switzerland and is taxable only in Russia. This is contradictory, which is why the (implicit) reference to a double taxation agreement is abusive. Consequently, the obligor is taxable at its domicile in the Canton of Zurich, regardless of whether its effective management or actual administration is located in Russia. Rejection.
- StRG ZH, 29 September 2020, DB.2020.4: Time of income inflow in the case of a mixed purchase and work contract (this decision is legally binding); the obligated party sold condominiums as a commercial real estate agent, which had yet to be built. Such a contract is to be qualified as a mixed contract with purchase and work contract elements. In contrast to the sale of existing apartments, the point in time at which income is generated due to the work contract component is not the time of the public notarisation of the contracts, but the time at which the apartments are completed/ready for occupancy and must be paid for by the buyer. Therefore, the taxpayer did not have to declare any profits in the year of sale or the tax authorities wrongly offset such profits at their discretion. Approval.
All decisions of the Tax Appeal Court of Zurich can be accessed here.
