The case

Direct federal tax and state and municipal taxes (Bern), withholding tax 2009 and 2010; B, resident in Spain, provided services to AAG, resident in Switzerland, which AAG booked under “franchise fees” as operating expenses. The cantonal tax administration of Bern qualified these “franchise fees” as income from employment and B subjected to withholding tax in this respect. The complainant, AAG, is not able to convincingly demonstrate that B did not provide the services in Switzerland and therefore no withholding tax was due. Furthermore, the complainant’s objection that B returned the benefits to AAG after the tax consequences became known does not change the tax liability of the latter, as a mere mistake of motive when concluding the contract is irrelevant under tax law. Dismissal of the taxpayer’s appeal. For more see link (German).

Source: taxlawblog (partially supplemented and amended)

The commentary

During the summer season, something to smile about: Waste taxes of Lohn-Ammannsegg 2019 (Solothurn): Correction of the lower court and approval of the taxpayer’s appeal. According to the municipal law of Lohn-Ammannsegg, the tax for waste is levied per household. The complainant (born 1928) still lived in her own flat in 2019, but no longer had her own household (son takes care of her). The Administrative Court of the Canton of Solothurn did not make any different findings of fact and based its reasoning essentially on the existence of two flats. Thus, it applied communal law arbitrarily. For more see link (German).

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