Procedural aspects of withholding tax

Case 1: Cancellation of a dividend

Facts

Zuschnell AG is the subsidiary of a foreign group holding company. At its Annual General Meeting on 1 April 2022, it approved a dividend of TCHF 15,000. A dividend due date was not specified. For cost reasons, the auditors did not attend the general meeting.

Following this dividend resolution, it turns out that, on the one hand, the necessary liquid funds are not available and that, on the other hand, sufficient reserves cannot be distributed under civil law. An extraordinary general meeting of Zuschnell AG will therefore be held on 15 April 2022 to cancel the dividend resolution of 1 April 2022.

Questions

1. What are the implications of the dividend resolution of 1 April 2022?
2. What are the implications of the Extraordinary General Meeting of 15 April 2022?

Case 2: Limitation

Facts

The FTA carries out an audit of the years 2017 to 2021 at Muster Produktions AG in February 2022. Muster Produktions AG produces product A and sells it to its foreign sister company, Muster Vertriebs Ltd, which sells it on the market. Both companies are fully owned by Muster Holding Ltd, UK. In the course of this audit, it emerges that since 2014, when Muster Produktions AG founded Muster Vertriebs Ltd. and switched from direct operation by Muster Produktions AG to the current system, Muster Vertriebs Ltd. has foregone an above-average part of its margin in favour of Muster Vertriebs Ltd. The withholding tax inspector therefore also requests the necessary audit documents for these years.

Questions

1. Are there any monetary benefits relevant for withholding tax?
2. Until when can the FTA record these services?
3. Does it matter that the audit has only been announced for the years 2017 up to and including 2021?

Case 3: Audit by the FTA

Facts

The FTA audits Täter AG, whose shares are held in full by Mr Lebegut. Mr Lebegut has constantly booked private life expenses via Täter AG. These pecuniary benefits will be uncovered for the years 2017 up to and including 2021. This results in monetary benefits of CHF 50,000 per year.

Alternative 1:

• Mr Lebegut acknowledges all monetary benefits.
• He has been definitively assessed for direct tax purposes up to and including the 2019 tax period, the 2020 tax return has been submitted, and the deadline for the 2021 tax return has been extended to 30 September 2022.

Alternative 2:

• Mr Lebegut does not recognise any of the monetary benefits.
• Mr Lebegut wants to take legal action against the FTA.
• He has been definitively assessed for direct tax purposes up to and including the 2019 tax period, the 2020 tax return has been submitted, and the deadline for the 2021 tax return has been extended to 30 September 2022.

Questions

Questions Alternative 1

1. How much is the withholding tax per year?
2. What is the procedure?
3. What is the situation under restitution law?

Questions Alternative 2

1. How much is the withholding tax per year?
2. What is the procedure?
3. What is the situation under restitution law?

Case 4: Audit by the cantonal tax administration

Facts

The competent cantonal tax administration audits the perpetrator AG. Tax Administration is auditing Täter AG, whose shares are held in full by Mr Lebegut. Mr Lebegut has constantly booked private life expenses via Täter AG. These pecuniary benefits are disclosed for the years 2017 up to and including 2021. This results in pecuniary benefits of CHF 50,000 per year. The cantonal tax administration takes the corresponding offsets from Täter AG for the profit taxes and from Mr. Lebegut on the one hand for definitively assessed tax periods within the framework of an after-tax procedure and on the other hand for open periods within the framework of the ordinary assessment procedure. Since all direct taxes have been paid and the security purpose of the withholding tax is therefore obsolete, the cantonal tax administration notifies the perpetrator AG and Mr Lebegut of the withholding tax. Tax Administration informs the perpetrator and Mr Lebegut that a report to the FTA for the purposes of withholding tax will be waived.

Questions

1. What is the withholding tax procedure?

Case 5: Casket

Facts

Luxus AG is held by Mr. Oligarch, resident in the Bahamas. It was established in 2000 through a contribution in kind of two foreign investments and has since retained approximately CHF 20,000,000 of reserves due to dividend distributions. The current structure and balance sheet as at 31 December 2021 is as follows:

Questions

1. What is the withholding tax situation of Luxus AG?
2. What are the concrete issues?