Appeal procedure

Case 1: Eyes open in the appeal procedure

1. facts of the case

Starting point:

A is the sole shareholder of the domestic X. AG (operational). He is resident in Zurich. X. AG has its registered office in Zug.

Variant 1:

By order dated 23 September 2021, A is required to pay back taxes and penalty taxes in the area of state and municipal taxes of the Canton of Zurich and direct federal tax for the tax periods 2013-2018. The 30-day objection period expired unused. On 5 February 2022, shortly after the pandemic-related home office obligation was converted into a home office recommendation, A submits a request to restore the objection period.

Question

• What is the appeal procedure if the assessment authority does not accept the objection?

Variant 2:

A is represented in tax matters by its trustee B.

All correspondence in tax matters is sent to the trustee B; A herself no longer receives any mail from the tax office. The ruling in the post-tax and criminal proceedings was therefore sent to B. B had been in Covid quarantine since August 2021 on the recommendation of the Inselspital Bern, as she belonged to a risk group. For this reason, it had been impossible for her to access the files in a timely manner and to contact the taxpayer A. A transfer of the mandate to another trustee had been impossible for time reasons and due to the complexity of the case. It is requested that the time limit for filing an objection be restored.

Questions

• Is the request for restoration of the objection period granted?
• B has no longer been responsible for mandate "A" since the end of August 2021 and "withdrew" her power of attorney from the tax authorities with a simple letter in mid-September 2021. Is the service of the order of 23 September 2021 valid?

Option 3:

A did not file tax returns for the tax periods 2015-2017. With regard to direct federal tax, he was imposed an administrative fine by rulings of 2017 (tax period 2015) and 2018 (tax periods 2016) (violation of procedural obligations by not filing the tax return, Art. 174 para. 1 lit. a DBG). A filed an objection against both rulings in September 2019. In a medical certificate dated August 2019 and February 2020, A was classified as 100% incapable of work for the period from September 2016 to August 2019 due to obsessive-compulsive disorder and depression. In November 2018, A filed a timely objection against the discretionary assessment concerning the 2015 tax period. A requests that the deadline be restored.

Question

• Is the request for restoration of the time limit granted?

Option 4:

X. AG is entered in the register for VAT payers. C is the legal representative of X. AG.

On 1 March 2020, the FTA sent a ruling by A-Post-Plus to the domicile address of C regarding input tax items that could not be deducted in the 2015 tax period at X. AG in the 2015 tax period. The ruling was delivered on 2 March 2020. X. AG filed a jump appeal with the Federal Tax Administration on 2 April 2020.

Questions

• Is the jump appeal the right remedy?
• Was the jump appeal filed in time?

Variant 5:

A is assessed for the 2012 tax period on 18 February 2014. On 31 March 2015, he receives a corrected, increased assessment ruling for the 2012 direct federal tax because, due to an error in the software of the tax authority's assessment programme, the building lease interest received - declared by A in the tax return - was inadvertently not taken into account. A is willing to appeal all the way to the Federal Supreme Court.

Question

• By which legal remedy/appeal did the tax administration return to the legally binding order?
• What are the requirements?

Option 6:

A owns a holiday chalet in Zermatt, in the canton of Valais. A has been renting this to the E family (resident in Bern) for years. The monthly rent is CHF 6,000.

The E family had only been partially willing to pay since 2005, which is why A took legal action against the E family in the same year - but due to assurances, acknowledgements of debt and promises on the part of the E family, A then did not take any further steps.

From 2007-2015, A declared the rent in full as income in his tax return despite partial uncollectability. The assessments for these tax periods have all become final and unchallenged. There are now high tax arrears.

Question

• Can the final tax assessments for the years 2007-2015 still be corrected?

Case 2: Intercantonal double taxation and procedural issues

1. facts of the case

Mr. and Mrs. A (hereinafter A) moved their residence from Zurich to Davos at the end of 2011. They were subsequently taxed with Davos as their main tax domicile for the tax periods 2011 to 2014. In the canton of ZH, there was a limited tax liability for these tax periods due to ownership of a property.

For the 2015 tax period, they were again assessed by the canton of GR in assessment rulings dated 2 March 2017. These rulings became final and unchallenged.

In a letter dated 22 November 2016, the tax office of the canton of ZH requested A to submit documents with regard to the examination of the unlimited tax liability in 2015. They complied with this request in a letter dated 29 November 2016.

On 8 January 2017, the tax office of the canton of ZH issued A a proposed assessment for the 2015 tax period, stating that the main tax domicile was in ZH and that A had unlimited tax liability in the canton of ZH as of the 2015 tax period. In a letter dated 27 January 2017, A objected to unlimited tax liability in ZH by explaining the different electricity and water consumption.

On 16 February 2018, the tax office of the canton of Zurich issued the 2015 assessment rulings, in which the main tax domicile and the unlimited tax liability in the canton of Zurich were maintained. These rulings became legally binding.

On 26 March 2018, A requested the Tax Administration of the Canton of GR to revise the assessment rulings of 2 March 2017 regarding the federal income tax and the cantonal and communal taxes for 2015. They justified their request as follows: The Canton of ZH had decided that they had their main tax domicile in ZH as of 2015. Moreover, in the case of double taxation, a request for revision exists even without an explicit reason for revision in the Tax Act.

The canton of GR does not know the institute of audit for intercantonal double taxation conflicts.

Questions

1. How will the Cantonal Tax Administration Graubünden decide?
2. How should Mr. and Mrs. A have proceeded in order to avoid double taxation with regard to cantonal and communal taxes?
3. How should Mr. and Mrs. A have proceeded in order to avoid double taxation with regard to direct federal tax?

Case 3: Taxes and social security contributions - selected aspects in procedural coordination

1. facts of the case

Starting point:

The German M. AG has a wholly owned subsidiary in Zurich, T. AG. Approximately 30 employees are employed by T. AG. Most of them are based in the greater Zurich area; some are resident and many have their roots in Germany.

Variant 1:

For the assessment periods 2015-2018, T. AG filed a non-penalised voluntary declaration with the Zurich tax authorities regarding undeclared salary components of its employees.

Question

• How should the after-tax procedure be coordinated with any steps taken vis-à-vis the compensation office? Does a penalty-free voluntary declaration also exist for social security contributions?

Variant 2:

The SVA Zurich has taken note of the non-penalised voluntary declaration for the tax periods 2015-2018 and now wishes to order retrospective contributions today, 12 May 2022.

In contrast to the tax authority, however, it does not consider the content of certain payments to be fully reimbursement of expenses, but in part as relevant salary.

Questions

• What about the statute of limitations?
• What special features are there to consider?

Option 3:

T. AG has, among others, employed the employee A. A is resident in Zurich. In Germany, A also holds an interest in a real estate company structured via a German partnership.

In this respect, he was recently and retroactively (rightly) classified as self-employed by the compensation office for the contribution periods that were not yet time-barred.

Questions

• Can the compensation office retroactively levy contributions up to 2013?
• Can the contributions be deducted for tax purposes? If so, at what point?

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