Focus on procedural law

Thomas Jaussi

Case 1: Hidden equity

1. facts of the case

Finanz GmbH, Switzerland, has had the following balance sheet since 2016 (figures in CHF):

The loan on the liabilities side bears interest at X.00 percent, the loan on the assets side at X.50 percent.
Finanz GmbH is definitively assessed up to and including the 2021 tax period.
TopCo USA is the indirect parent company of Finanz GmbH, SubHold EU is a "sister company".
The cantonal. StV will ask in 2023 with regard to the 2022 tax period whether there is any hidden equity and interest on it.
The tax advisor recommends accepting hidden equity / offsetting interest on hidden equity for the 2022 tax period and submitting a form 102 to the FTA for withholding tax for 2022.

Questions

Is Finanz GmbH acting correctly?
What is the main topic?
What changes if the lender is a domestic parent company that directly holds Finanz GmbH?

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Case 2: Who's the boss here?

1. facts of the case

The companies of the Muster Group are held by Mr. Muster via Muster Holding AG. Mr. Muster and all Muster Group companies have their domicile or registered office in the same canton. Muster Management AG provides Mr. Muster with personnel and services for his personal needs. The cantonal tax administration audits the tax periods n, n+1 and n+2 of Muster Management AG, in particular the recharging of costs to Mr. Muster, and finds everything to be correct. Consequently, neither Muster Management AG nor Mr. Muster are subject to offsetting for these three tax periods.

The FTA, VAT Division, carries out an audit of Muster Management AG for the years n, n+1, n+2, n+3 and n+4.

On the service invoices of Muster Management AG to Mr. Muster, the company charges non-cash benefits of CHF 50,000 p.a.

In view of the low tax rate, an appeal is waived.

Immediately afterwards, a letter arrives from the FTA, HA DVS:

Withholding tax on CHF 250,000 Interest on arrears
Announcement that refund will probably not be granted due to lack of proper declaration
Threat of examination of the consequences under criminal law

Question

‍‍Isthe FTA's approach correct?

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Case 3: Deadline

1. facts of the case

Mr. Muster is the sole director of Muster AG, which in turn is owned by Muster Holding AG
On June 30, 20XX, Muster AG declares a dividend without maturity
On August 10, 20XX, Mr. Muster submits Form 103, Form 106, the annual financial statements and the minutes of the AGM
On September 1, 20XX, the notification is confirmed, but a fine of CHF 2,500 is imposed for delay

Question

Is the FTA's approach correct?

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Case 4: Origin of the withholding tax claim

1. facts of the case

Zuschnell AG is held by Mr. Muster. It approves a dividend on June 30, 20XX, whereby the Annual General Meeting has not set a due date. An Extraordinary General Meeting is held on July 10, 20XX, which cancels the dividend that has not yet been distributed.