The case

State and municipal taxes and direct federal tax 2015, 2016 and 2017 (Ticino). In the present case, there is no violation of the prohibition of confiscatory taxation pursuant to Art. 26 of the Federal Constitution or Art. 8 para. 2 let. h KV TI. It is true that the amount of direct taxes owed exceeded the taxable income of the taxpayer in three years due to the high wealth taxes. However, the taxpayers’ assets consisted in part of shares in a solely controlled entity in which dividends could have been distributed. The taxpayers’ appeal was dismissed. For more information see link (Italian).

Source: taxblog and BGE of 8 October 2021 (2C_44/2021) (Italian)

The commentary

Art. 26 para. 1 BV “Guarantee of property”: (…) The tax rate (alone) is not decisive for determining whether a taxation is confiscatory. It is to be examined what burden the taxation represents over a sufficiently long period of time. Extraordinary events are to be disregarded. The totality of the concrete circumstances, the duration and severity of the damage caused, as well as the accumulation with other taxes or charges and the possibility of shifting the tax burden to third parties are to be taken into account (BGE 143 I 73 para. 5.1 with further references to case law and doctrine). (Source: 4.1 of the judgement)

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