Discretionary assessment

 Case 1: Discretionary taxation Ylona Muster

1. facts of the case

The municipality applies to you for a discretionary assessment of the taxpayer Ylona Muster. It is known

• Tax year affected: 2020
• Year of the taxpayer: 2002
• Municipal request:
• GT
• Taxable income: CHF 35'000
• Assets: 0

Questions

• Which instruments could help you?
• How high is your discretionary taxation?

Case 2: Discretionary taxation Peter Basler

1. facts of the case

Peter Basler has not submitted a 2020 tax return despite reminders and registered reminders. You can see from the previous year's tax return that Peter:

• Studied business administration until August
• Completed an internship at Raiffeisen in September
• Has earned CHF 20,000 net by the end of the year

Questions

• What questions arise in the discretionary taxation for 2020?
• What is your estimate?

Case 3: Discretionary taxation of unclear assets

1. facts of the case

What they know from the files: The person is a prominent representative of Zurich's business circles. In previous years, she was often listed in the press as one of the wealthiest Swiss.

In the previous year, taxable income amounted to CHF 650,000 and assets to CHF 95,000,000.

Question

• What is your estimate?

Case 4: Discretionary taxation: Tibor Träumer

1. facts of the case

Tibor Träumer has not filed a tax return for years. This year, too, there is no receipt on file. You know from previous years:

• Tax period 2015: At discretion, GT, income 120,000, assets 0
• Tax period 2016: After appeal, GT, income 115,000, assets 0
• Tax period 2017: At discretion, GT, income 135,000, assets 200,000
• Tax period 2018: Discretionary, GT, income 125,000, assets 150,000
• Tax period 2019: At discretion, GT, income CHF 120,000, assets 150,000

You know from the municipality: Mr. Träumer is divorced, the minor child lives with the child mother, the taxes have always been paid. He is known in the community as a successful architect (employed, not self-employed).

Question

• What is your estimate for the 2020 tax period?

Case 5: Discretionary taxation: Tibor Träumer (variant)

1. facts of the case

After you have been unable to decide, have the SVA prepare an IK statement on the contributions paid. This shows that Mr Träumer earned gross:

• 2018: CHF 144'000
• 2019: CHF 201'000
• 2020: CHF 239'000

In addition, a telephone call to the canton of Aargau reveals that he pays alimony and maintenance in the amount of CHF 100,000 per year.

Question

• What is your estimate based on this information?

Case 6: Partial discretion

1. facts of the case

The files show:

• The taxpayer is the owner of a single-family house. The house was built in 1988, has a tax value of CHF 600,000 and a corresponding imputed rental value.
• In recent years, smaller renovations have been carried out on an ongoing basis. In 2019, extensive renovations were then carried out
• In the tax return, the taxpayer declares actual costs of property maintenance of CHF 223,000. In several items, he calculates an increase in value of between 10 and 30%.
• CHF 185,000 he deducts

A list is enclosed with the tax return. Almost all items are architect's fees, building permit and master builder's work. The invoices are enclosed, but do not allow any precise conclusions to be drawn about the work performed.

Further background:

The building permit is a permit for early start of construction.

The project is: "Conversion, balcony extension and partial conversion of the property cat. no. ...".

The 2019 tax year is just the beginning. It is already apparent that further investments will be deducted in the following year. Over the entire period, the costs of the conversion amount to around CHF 1,000,000. The increase in value of the GVZ amounts to CHF 480,000.

If the costs are fully deductible, no taxable income results.

Question

• What would you do as a tax commissioner?

Case 7: Appeal I

1. facts of the case

In April 2020, the tax authorities audited the accounts of the Merki painting company for the 2018 business year. As a result, it was determined that depreciation in the amount of CHF 33,000 cannot be accepted under tax law and that further expenses in the amount of CHF 12,689 are predominantly of a private nature and are therefore not justified in terms of business.

The tax administration makes a discretionary assessment in accordance with Art. 130 para. 2 DBG and Art. 46 para. 3 StHG and assesses a profit CHF 55,000 higher than declared.

Question

• What can painter Merki do about it?

Case 8: Remedies II

1. facts of the case

(based on BGr, 22.12.2012, 2C_61/2021)

After the tax administration of the Canton of Basel-Stadt had twice unsuccessfully reminded A. Sutter to submit the tax return, it assessed him on a dutiful discretionary basis within the meaning of Art. 130 para. 2 DBG and Sec. 158 para. 2 StG BS on a taxable income of CHF 50,000 and taxable assets of CHF 900,000.

A. Sutter objected to this and enclosed a completed tax return.

In his tax return and the enclosures, A. Sutter essentially provided substantiated information on his income, expenses and assets. Under "other compensation", under which he subsumed various smaller incomes as a lecturer, speaker, curator, consultant and author of specialist publications, he declared "an estimated CHF 10,000". In addition, as in previous years, he declared maintenance and compensation payments to family members, some of whom reside abroad.

A. Sutter submitted evidence in the form of a salary statement for employment in Switzerland and a certificate confirming a contribution of CHF 3,000 to a tied pension plan (pillar 3a). He did not submit any other evidence. He also did not formulate any explicit offers of evidence.

Due to the lack of offers of evidence and the merely estimated other compensation, the tax administration came to the conclusion that the formal requirements for an objection were not met and did not accept the objection.

Question

• Is the tax administration justified in not accepting the objection?